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.

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AZ Daily Sun--Coconino Voices: PRO Act legislation would hurt local businesses

— 05.13.2021 —
By: Julie Pastrik Arizona businesses and workers have had an incredibly challenging year given the economic slowdown that followed in the wake of the coronavirus pandemic. However, local businesses and industries across the state are resilient and on the road to a strong recovery that will mean more jobs for Arizona workers and increased economic development to strengthen our communities. That is, as long as Congress does not move forward with potentially devastating legislation that would hurt local employers and employees alike while impeding our state’s economic recovery. Unfortunately, some members of Congress seem determined to do just that by pushing through the Protecting the Right to Organize (PRO) Act. As harmless as the name may sound, the PRO Act would have serious repercussions for local businesses, particularly smaller ones, while undermining long-standing rights for employees and threatening the growing gig economy that has helped provide much-needed income for so many during this time. Arizona is fortunate to have leaders like Senators Mark Kelly and Kyrsten Sinema, who have both refrained from joining the vast majority of their Democratic colleagues in cosponsoring the PRO Act. In a slap in the face to Arizona workers, the PRO Act removes one of the most fundamental rights a worker has when it comes to voting in elections to determine whether to unionize: the secret ballot. Instead, workers could be forced to sign union authorization cards in front of other employees, their employer, or union organizers. This bill would also destroy workers’ right to privacy by allowing unions access to personal information, including their home address and personal phone number. If that doesn’t open the door to union intimidation and harassment, I don’t know what does. As if that was not bad enough, the PRO Act would create major new challenges for Arizona businesses, making it harder for them to create jobs, expand in their communities, and even keep their doors open. It would redefine what it means to be a “joint employer” under national labor law, greatly complicating existing relationships between franchisors and franchisees as well as between business owners, contractors, subcontractors, and vendors and suppliers. At the same time, it would interfere with attorney-client confidentiality and make it much more difficult for small businesses to secure a legal advice on labor issues. Particularly harmful during these times, the PRO Act would apply a failed policy from California to national labor law by using the “ABC” test to determine whether a worker is an independent contractor or employee. This makes it much harder to qualify as an independent contractor, threatening the freedom and flexibility that tens of thousands of Arizonans find in independent contracting and gig economy work. Ultimately, the PRO Act is bad public policy that only works for union leaders to inflate their falling ranks while threatening workers’ rights, undermining small businesses, and jeopardizing a growing part of our economy. This is not a good solution for Arizona, and Senators Sinema and Kelly should stay firm and not cosponsor this misguided legislation.
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