Re: Request for Abandonment or at Least Postponement of DOL’s Anticipated Overtime Regulations under the Fair Labor Standards Act
Dear Acting Secretary Su:
The Partnership to Protect Workplace Opportunity (PPWO or Partnership) and the Tire Industry Association (TIA) urge the Department of Labor’s (DOL or Department) Wage and Hour Division to abandon or at least postpone issuance of its announced proposed rulemaking altering the overtime regulations under the Fair Labor Standards Act (FLSA).
?The Department's Fall 2022 Regulatory Agenda targeted this May for release of a proposed rule. Even though the COVID-19 public health emergency has been lifted, concerns with supply chain disruptions, workforce shortages, inflationary pressures, and the shifting dynamics of the American workforce persist, and any rule change now would threaten a particularly vulnerable and recovering economy.
PPWO is a coalition of a diverse group of associations, businesses, and other stakeholders representing employers with millions of employees across the country in almost every industry. Formed in 2014, the Partnership is dedicated to advocating for the interests of its members in the regulatory debate on changes to the FLSA overtime regulations. PPWO’s members believe that employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, employees’ career advancement opportunities, and clarity for employers when classifying employees.
In the Fall 2021 Regulatory Agenda, DOL announced that it planned to issue a Notice of Proposed Rulemaking (NPRM) on the “exemption of bona fide executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime requirements” (also known as the white-collar exemptions). In anticipation of the NPRM, PPWO called on DOL “to follow past precedents and hold meetings with the regulated community to obtain input on the potential impact of any changes to the overtime exemption requirements.” PPWO thanks the Department for holding listening sessions last Spring in response to the coalition’s request.
As DOL heard throughout their meetings with the employer community, changes to the white-collar exemptions under the FLSA would disrupt a vulnerable economy. That remains as true today as it was last year. The National Federation of Independent Business’ Small Business Optimism Index decreased by 1.1 points in April to 89.0. This marks the 16th consecutive month below the survey’s 49-year average of 98.2. The NFIB also found that business owners expecting better business conditions over the next six months declined two points to a net negative 49 percent.
Industries across the country are still recovering from the impact of the COVID-19 pandemic. Some industries were hit significantly harder than others, including restaurants, the travel industry, and workout facilities. Further, current workforce shortages, supply chain disruptions, economic contraction, and inflation are pushing operational costs ever higher. Inflation remains historically and persistently high, supply chains still struggle to keep up with demand, and businesses nationwide cannot hire enough workers to operate at full capacity. At the same time, we are seeing economic contraction in some sectors and face the specter of both inflation and a recession. Many businesses are not well-positioned to absorb new labor costs associated with changes to the overtime pay regulations, and such changes would only exacerbate the difficulties businesses are currently facing.
Additionally, as we noted in our letter last year, the COVID-19 pandemic forced the American economy and workforce to adapt to changing circumstances. One of the most significant changes was the move towards remote, hybrid, or part-time work for a significant number of workers, and many of these workers want to continue to work in these new arrangements. This new normal makes compliance with potential changes to the white-collar exemptions measurably more difficult. To comply with overtime regulations, employers will be obligated to monitor nonexempt employees’ worktime, but that may not be compatible with these new workforce dynamics. Consequently, changes to the white-collar exemptions may leave many workers unable to enjoy the part-time or remote work they’ve come to appreciate. Moreover, DOL’s last update to the overtime regulations went into effect in 2020 – just three years ago, which strongly suggests there is no need for urgency in issuing more changes.
For these reasons, we urge the Department to abandon or at least postpone issuance of its announced NPRM until the current economic situation stabilizes and improves to allow the American workforce, employer community, and DOL itself to more fully understand how the pandemic has shifted the paradigm of work in America.
Thank you for considering these comments.
Sincerely,
Tire Industry Association and other trade associations
On June 3, 2023, President Joe Biden signed H.R. 3746, the Fiscal Responsibility Act, which paired spending cuts and caps with suspending the debt limit through January 1, 2025.
The agreement calls for $40.2 billion in cuts to non-defense spending, institutes a 1% mandatory reduction in spending if all 12 appropriations bills are not passed in a timely way, and rescinds certain unspent COVID funds including some funds dedicated to the Federal Highway Administration.
Of interest to TIA, the agreement included portions of H.R. 1577, the BUILDER Act, which reforms NEPA with a two-year deadline for the lead agency to complete an environmental impact statement, and one year for an environmental assessment. Additionally, the bill protects the IIJA from future cuts, by ensuring that any cuts from the program will not be deemed as savings and cannot be used to pay for new spending.
Despite the cuts and caps included in this bill, TIA will continue to lobby in support of funding above IIJA levels to deal with the backlog in bridge and highway investments and offset the impact inflation has caused on the cost of highway projects.