House GOP Pushes To Stop DOL’s Proposal To Expand Overtime

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Juliegrace Brufke Capitol Hill Reporter
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House Republicans fought to stop the Department of Labor’s proposed rule that would expand the scope of people who qualify for overtime compensation during a hearing Thursday.

GOP members of the Subcommittee on Investigations, Oversight and Regulations went after the Obama administration’s regulatory push, saying the modification of the Fair Labor Standards Act will inhibit small businesses from creating jobs due to the increase in overhead costs.

“The administration’s own chief counsel for advocacy at the Small Business Administration stated that the analysis relies on numerous assumptions and lacks detailed industry information — even though it is available,” said Chairman Cresent Hardy in his opening statement. “For example, the proposed rule would raise the salary level under which employees qualify for overtime pay from $23,660 a year to $50,440 a year in 2016. That is a 102 percent increase that will have a heck of an impact on a small business owner’s bottom line.”

According to the Labor Department, the rule would immediately extend overtime protection to 5 million white-collar workers currently exempt under the FLSA.

Democrats argued the increase in pay would help put money back into the economy, claiming regulation isn’t the root of the problem.

“I just don’t agree with the idea that stagnant wages are only about regulation,” said Rep. Mark Takano, citing the great recession as the root of the issue, and saying he believes the rule would promote job growth.

Hardy said the “one-size-fits-all” approach doesn’t work for companies in rural areas that can’t afford the wage increases.

Ed Brady, the president of Brady Homes Illinois, said he’s concerned about how the changes would affect how he compensates his employees.

“I am already considering whether the company will need to take steps to minimize paying overtime to the supervisor should the DOL proposal become law,” he said in his testimony. “Another issue with the rule is that it doesn’t consider the total compensation package a worker receives. Even if the worker’s salary is increased, his or her benefits could go away.”

Terry Shea, speaking on behalf of the National Retail Federation, said it would be forced covert salaried managers into hourly non-exempt employees.

“Like most retailers, our labor costs are a fixed percentage of our sales, which means we can’t just increase everyone’s salaries by such a large amount, nor can we pass the more than 100 percent increase along to our customers in the form of higher prices,” she said.

The rule could become effective as soon as 2016.

“The impact of this regulation, and that of the countless other regulations we have examined here at the Small Business Committee, shows that this Administration is tone deaf when it comes to actually helping small businesses,” said Hardy.

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