Letter supporting "Protecting Workplace Advancement and Opportunity Act"

Wednesday, March 30, 2016 - 1:00pm

Dear Chairmen Alexander, Kline, and Walberg and Senator Scott:

The U.S. Chamber of Commerce, the world’s largest business federation representing the
interests of more than three million businesses of all sizes, sectors, and regions, as well as state
and local chambers and industry associations, and dedicated to promoting, protecting, and
defending America’s free enterprise system, applauds your introduction of the “Protecting
Workplace Advancement and Opportunity Act,” which would stop the Department of Labor’s
(DOL) misguided proposed overtime regulation from going forward and require DOL to conduct
more complete analyses on its impacts before issuing a new rule.

DOL’s proposed overtime regulation is now pending at the Office of Management and
Budget for review. Many employers and employees, including those in the private sector, the
non-profit sector, and state and local governments, will be adversely affected by the
Department’s proposal should it be finalized. Specifically, the proposed rule would more than
double the current minimum salary threshold, making virtually all employees who earn salaries
below that threshold eligible for overtime pay as set by the Fair Labor Standards Act.

While there may be a need to adjust the salary threshold, the magnitude of the proposed
rule’s updated minimum salary threshold is unnecessarily onerous. The proposal’s 113%
increase would threaten currently exempt employees’ workplace flexibility and opportunity by
forcing employers to reclassify them to nonexempt status under the new threshold—essentially
amounting to a demotion as millions are moved from salaried to hourly and begin punching a
time clock. Overtime eligibility does not guarantee employees actually receive overtime, as
employers can, and many would, limit work schedules to 40 hours or fewer in a week. In

addition to the added labor costs, the proposal would also result in added costs for employers
more closely monitoring employees’ time, and updating their human resource systems.

After blocking the current proposal from being implemented, this bill would require DOL
to conduct a more complete economic analysis of the impact on businesses of all sizes, non-
profit employers, healthcare providers, and small governmental jurisdictions before
promulgating a new rule. DOL relied upon flawed economic data, ignored many differentiating
geographic and market factors, and severely underestimated the impacts of this rule. This bill
would require DOL to more accurately assess the impact of any similarly proposed rule on a
variety of these essential metrics, regions, and employers not previously considered.

Finally, this bill would also, importantly, prohibit any future rule from including
automatic updates to the salary threshold as was proposed by this rule. The proposed automatic
update mechanism would deprive employers of notice and comment rulemaking, and would
ensure that future increases would take effect during difficult economic periods—exactly the
worst time to raise labor costs.

DOL’s proposed rule redefining the exemptions from overtime compensation would
threaten workplace opportunity and the economy. The Chamber thanks you for introducing the
“Protecting Workplace Advancement and Opportunity Act” and looks forward to working with
you on this important bill.

Sincerely,

R. Bruce Josten