Ripon Advance - Lawmakers Voice Concerns About Department of Labor Overtime Rule's Impact on Businesses, Jobs

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Republican lawmakers voiced concerns on Wednesday about the impact of a new rule expanding overtime for salaried employees would have on small businesses and jobs.

The Department of Labor (DoL) announced on Wednesday that employers would be required to pay overtime to salaried employees who earn less than $47,476 per year. The previous threshold for overtime pay for salaried employees was $23,660.

U.S. Sen. Susan Collins (R-ME) said that the rule would be "extremely damaging" to small businesses, nonprofits, universities and service industries.

"While I support an increase in the salary threshold, a huge and sudden increase like this could hurt workers and employers alike and limit the services provided by nonprofits and educational institutions," Collins said. "The University of Maine system, for example, has estimated that this new rule change could increase its operating cost by up to $14 million in a single year. To combat these dramatic new costs, institutions like those in the Maine system would be forced to cut valuable research and limit educational opportunities for their students. Likewise, small businesses could be forced to cut hours, benefits, and employees. The effect of this increase will be repeated at nonprofits and small businesses across the country."

Collins cosponsored the Protecting Workplace Advancement and Opportunity Act, S. 2707. The bill would nullify the rule and require that the DoL take into account the impact of future rules on small businesses, different regions and lower-wage industries.

U.S. Rep. Barbara Comstock (R-VA) said that she has heard about the threats these new rules pose to employees of small businesses, restaurants, hotels, startups and nonprofits in her district.

"The new overtime rules hurt the very people they are supposed to help," Comstock said. "These kinds of misguided policies lead to fewer hours and elimination of benefits to existing employees while limiting new opportunities to entry level employees. As Consumer Technology Association President Gary Shapiro said today, "Say goodbye to teams of young minds pulling all nighters to create something new.' Make no mistake; this is one more attack by this administration on American entrepreneurship."

Comstock cosponsored the House version of the Protecting Workplace Advancement and Opportunity Act, H.R. 4773.

U.S. Sen. Mike Rounds (R-SD) said that the mandate would hurt both employees and employers.

"Under this rule, restaurants, retailers and small businesses across South Dakota will be faced with increased labor costs or be forced to transition their managers from salary to hourly pay and most likely limit the number of hours they work," Rounds said. "This rule makes it more difficult for new and mid-level workers to support their families and advance their career. The best way to strengthen the middle class is to grow our economy by lowering the tax burden, removing costly regulatory mandates and increasing workplace flexibility. Unfortunately, this new rule will have the opposite effect."

U.S. Rep. Pat Tiberi (R-OH) has also supported legislation to prevent the DoL's rule from taking effect.

"Here we go again with another attempt by the Obama administration to sugarcoat a burdensome regulation that will hurt job creators' ability to grow and succeed," Tiberi said. "I've heard from a number of businesses owners in my district who strongly oppose the Department of Labor's overtime rule because they fear it will force them to cut hours and limit opportunities for their employees."

U.S. Rep. Charles Boustany (R-LA) added that it was "typical" for the administration to assume that it could build a stronger middle class through "heavy handed regulation."

"Instead of empowering small businesses to grow and raise wages for all workers, the administration's backwards overtime rule will likely cause workers to be demoted from salaried to hourly positions, reducing their ability to get overtime pay," Boustany said. "I am opposed to this job-killing regulation and urge my colleagues in Congress to join me in looking for ways to block its implementation as soon as possible."

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