Yet Again, Big Government Interferes With Growth And Jobs

Heather Greenaway

Millions of salaried workers are now in danger of losing their professional status and potential for upward mobility, with last week’s Department of Labor release of the final federal overtime rule. The Obama Administration has been no friend to the business community, advocating for a myriad of job-killing regulations and changing decades of defined labor policies, but this might be the most egregious overreach yet. The rule, which raises the salary threshold for workers who qualify for overtime pay from $23,660 to $47,476 – an increase of more than 100 percent – is yet another example of the administration’s out-of-touch view of the needs of America’s workforce.

Hurting the very people it is intended help – with entry-level professional employees and non-profit employees burdened the most – the new rule stunts workers’ professional growth, while also creating a massive regulatory burden on employers, who will be required to oversee careful timekeeping or open themselves up to lawsuits. A simple email response sent or phone call taken after normal business hours will now have to be tracked as time on the job.

The overtime rule sets an artificial ceiling on salaried workers, and will cause many small businesses to declassify their salaried employees and eliminate benefits with the loss of professional status. Expect to see a hollowing out of mid-level positions as employers transition roles to covered employees or part-time help.

Aspiring professionals will be disadvantaged by this rule the most. While current college graduates and other entry level employees are generally advised to prove their value by working hard to climb the professional ladder, this usually involves taking on extra projects and working longer hours to prove their worth. But this policy, by limiting the number of hours they can work weekly, interferes with an individual’s ability to determine their own career goals and choices. Entry- and mid-level salaried employees at issue were hired to fulfill a professionalized role, not an hourly job. You simply can’t view their role through the same lens as you would a factory worker or fast-food server who clocks in and out every day for an hourly wage – many professional jobs require more than the typical nine to five.

Expect flexibility in the workplace to acutely be impacted, as well. Salaried workers are often given more flexibility to complete their responsibilities, with specific hours mattering less, as long as the job gets done. But workers who have enjoyed flexibility in the past, like the 16 to 25 million Americans who telecommute at least once a month, will likely see those options eliminated thanks to the new rule. And the Department of Labor’s failure to take into account regional differences, even though a $47,000 salary has a much greater spending power in Pierre, South Dakota than it does in Washington, D.C., could deal a crippling blow to professionals in rural areas.

Economists and labor policy experts have studied the impacts of overtime requirements on businesses, and have found time and again that companies offset new overtime costs with the lowering of base wages. In fact, a recent report by Anthony Barkume, Senior Research Economist with the U.S. Bureau of Labor Statistics’ Office of Compensation and Working Conditions, calculated that workers pay for 80 percent of overtime costs through cuts in their base wages.

So if increasing wages wasn’t the Obama Administration’s goal, what was?

According to the text of the rule, the two policy objectives outlined are to “spread employment … by incentivizing employers to hire more employees rather than require existing employees to work longer hours,” and to “reduce overwork and its detrimental effect on the health and well-being of workers.” Workers want to work more, not less. They want to rise through the ranks in search of the American Dream, not have their potential hindered by big government controlling the lives of individuals.

A one size fits all approach to labor policies is incredibly misguided and will have ramifications across our entire economy. Republican leaders in Congress are already working to pass legislation nullifying the overtime rule, the Protecting Workplace Advancement and Opportunity Act. Let’s hope they succeed, and soon, before the American workplace is permanently changed for the worse.

Tell Congress: Stop the PRO Act

WFI is working to prevent passage of the so-called Protecting the Right to Organize Act (PRO Act)—a wholesale labor reform package that takes the current careful balance of labor rules and tips it greatly in the favor of labor bosses and forced collective bargaining.

The PRO Act robs workers of the right to a secret ballot to form a union, forces union contracts on workers without a vote of approval, and expose workers’ personal contact information to union bosses seeking to organize a workplace. And that’s just the start.

Help us speak out against this woefully misguided and blatantly anti-worker legislation. Review and send the message below to your members of Congress today.

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WFI Key Vote Letter: Opposition to PRO Act

— 02.10.2020 —
Dear Speaker Pelosi and Minority Leader McCarthy: On behalf of the Workforce Fairness Institute (WFI), I am writing to share our organization’s vehement opposition to H.R. 2474, the Protecting the Right to Organize Act (PRO Act). WFI has serious concerns with the broad, overreaching nature of this legislation and the many ways in which it would undermine worker freedom and privacy, while simultaneously threatening businesses and entire industries that keep America’s economy thriving. Please note that WFI will include votes on the PRO Act and its amendments on our Congressional Labor Scorecard, which scores and ranks legislators based on their activity associated with workplace issues. WFI was established to fight for American employees and employers as well as our entire economy. We believe in worker empowerment, the right of workers to be fully informed of the options available for worker-involvement in the workplace, and the right to freely choose whether to organize or not. No individual or group – government, a union or an employer – should be able to intimidate or restrict workers’ in exercising these rights. In an attempt to boost flailing union membership at the expense of workers’ rights, the PRO Act would upend decades of established U.S. labor law and institute myriad anti-employee and anti-employer policies that have already been soundly rejected—by Congress, various federal agencies, or the courts. Among its most blatant affronts to workers’ rights, the PRO Act would eliminate the right to a secret ballot when determining whether to unionize and enforce a “card check” system, exposing workers to the potential for harassment, intimidation, and coercion. The PRO Act would also enforce binding arbitration in union negotiations by a government- appointed bureaucrat; repeal and eliminate right-to-work laws in 27 states, force workers to fund union activities regardless of whether they support them; and threaten the ability of individuals to operate as independent contractors, eliminating traditional economic and employment opportunities and threatening the independence and flexibility of the emerging gig economy. On top of all that, the PRO Act would force all workers’ personal and home contact information to be provided to a union during organizing campaigns – in an electronic, searchable format no less, with no limit on what a union can do with that information. WFI believes in advancing sensible policies that protect and preserve the rights of both employees and employers, and we welcome the opportunity to work with legislators who also support these efforts. However, the PRO Act does not achieve these goals and would instead threaten the rights of both while jeopardizing our entire economy. WFI urges members of the House to strongly oppose the PRO Act. Sincerely, Heather Greenaway Executive Director Workforce Fairness Institute See the letter here.
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