ABC reiterated its opposition
to the Department of Labor’s (DOL) one-size-fits-all overtime proposal ahead of the Oct. 8 U.S. House of Representatives Small Business Committee Subcommittee on Investigations, Oversight and Regulations hearing
on how the proposed regulation would impact small business owners and their employees. The proposed rule
, which was issued July 6, makes changes to existing regulations under the Fair Labor Standards Act (FLSA) that define which employees are exempt from overtime pay.
At the hearing, lawmakers heard from small business owners about the burden that the overtime proposal would have on their businesses. They cited increased compliance costs, the failure to consider regional economic differences, and the lack of clear guidance on whether there would be a change to the duties test in the final rule among their chief fears. Additionally, the business owners worried about how the rule would impact the accommodations they would be able to provide their managers, explaining that the overtime proposal would force them to consider demoting their salaried employees to hourly roles and limit their benefit packages.
The new proposal would nearly double salary levels for “white collar” exempt employees, the highest increase in the 77 year history of the FLSA, from $455 per week to $970 per week. Additionally, the proposed rule automatically updates the salary levels on an annual basis, forcing employers to reconsider the classification of their employees annually. According to DOL’s own estimates, over 4.6 million workers would need to be reclassified in the first year alone under the new rule.
ABC sent a letter
to Subcommittee Chairman Rep. Cresent Hardy (R-Nev.) and Ranking Member Rep. Alma Adams (D-N.C.) in advance of the hearing expressing its opposition to the overtime proposal due to its harmful impact on the construction industry. ABC explained, “Construction employees and employers have long used the established ‘white collar’ and highly compensated employee (HCE) exemptions to create flexible and resourceful workplaces that encourage career advancement and help to avoid misclassification of workers. By raising the threshold in which employees can qualify for these exemptions by such an enormous amount, the administration has created an artificial roadblock for career development for the millions of workers this would affect.”
In addition, ABC and more than 900 members submitted comments
Sept. 4 to DOL’s Wage and Hour Division urging them to withdraw their proposed rule.