05.18.16

Obama Reg ‘Demoting Millions Of Workers’

‘Small Businesses, Nonprofits, And Public Sector Employers Will Be Especially Impacted’


SEN. MITCH McCONNELL (R-KY): “Our economy continues to be stuck in the worst recovery since World War II and the only solution the Obama Administration can come up with is more red tape that will hurt our nation’s working middle class. Just like Obamacare’s 30 hour work week, this regulation will once again incentivize employers to cut worker hours, provide fewer benefits, and hinder flexible work arrangements for hardworking Americans.” (Sen. McConnell, Press Release, 5/18/16)

  • “Obama rushes out rules to guarantee legacy ... The Obama administration is shoveling out regulations nearly one-third faster in its final year than during the previous three ... One of the most significant — a sweeping rule that will extend overtime pay to more than 4 million people without any input from Congress — was released Tuesday night.” (“Obama Rushes Out Rules To Guarantee Legacy,” Politico, 5/18/2016)

‘Small Business Owners Facing Some Hard Choices’

“The government's new rules requiring overtime pay for millions of workers have small business owners facing some hard choices. … Many businesses like restaurants, retailers, landscapers and moving companies will have to transition staffers, many of whom are low-level managers, to hourly pay and limit the number of hours these employees work. That can increase the workload for other staffers, have everyone scrambling to get work done in fewer hours and hurt morale. Some owners say they'll have to limit hiring, cut services or other costs. Others are turning to technology to try to get work done in less time.” (“New OT Rules Force Small Businesses To Make Hard Choices,” AP, 5/18/16)

  • “Chad Brooks expects to switch managers at his eight franchise restaurants to hourly pay, and plans to send them home as soon as their shifts are over. Other staffers at the Pittsburgh-area Qdoba and Burger 21 franchises will have to pitch in to handle their work. Brooks already foresees problems, for example, if a customer wants to complain to the manager. ‘Guests will be extremely frustrated when they ask, 'where's the manager,' and a worker says, 'he's not here,'’ Brooks says.” (“New OT Rules Force Small Businesses To Make Hard Choices,” AP, 5/18/16)
  • “Automation is the answer for Deborah Sweeney. She's investing in customer service software for her online business services company, MyCorporation, because she expects higher overtime costs to limit her ability to hire more staffers. Thirty of the 43 employees at the Calabasas, California-based company will be affected by the new regulations. Software programs will help handle MyCorporation's growing workload.” (“New OT Rules Force Small Businesses To Make Hard Choices,” AP, 5/18/16)

JOBS GROUPS: ‘Another Regrettable Burden Being Piled On Employers … In A Tepid Economy’

DAVID FRENCH, National Retail Federation: “These rules are a career killer. With the stroke of a pen, the Labor Department is demoting millions of workers. In the retail sector alone, hundreds of thousands of career professionals will lose their status as salaried employees and find themselves reclassified as hourly workers, depriving them of the workplace flexibility and other benefits they so highly-value. And the one-size-fits-all approach means businesses trying to make ends meet in small towns across America are now expected to pay the same salaries as those in New York City.” (“NRF Calls New Overtime Rules A ‘Career Killer,’” National Retail Federation, 5/17/16)

JUANITA DUGGAN, National Federation Of Independent Business: “Entry-level management positions are going to disappear and those employees will fall back into hourly jobs… Small businesses everywhere will be affected, but most of the damage will occur in places where the cost of living and the wage scale is much lower than it is in Washington, DC, or Manhattan, or San Francisco.” (“NFIB Warns That Overtime Rule Will Increase Costs And Push Salaried Employees Into Hourly Jobs,” NFIB, 5/18/16)

ROSARIO PALMIERI, National Association of Manufacturers: “…this regulation creates barriers to opportunity, severely limiting flexibility and dramatically increasing red tape, especially for small manufacturers who cannot afford the burdens of a 99 percent salary increase for management employees who are exempt from overtime pay.” (“New Labor Regulations Are Negatively Changing Modern Manufacturing,” NAM, 5/18/16)

RANDY JOHNSON, U.S. Chamber of Commerce: “…the revised overtime regulation issued today … represents another regrettable burden being piled on employers as they attempt to grow in a tepid economy. The regulation demonstrates this administration’s determination to control employers instead of creating conditions for economic growth.” (“Overtime Rule Will Burden Employers In Tepid Economy,” Press Release, 5/18/16)

  • JOHNSON: “…the dramatic escalation of the salary threshold, below which employees must be paid overtime for working more than 40 hours a week, will mean millions of employees who are salaried professionals will have to be reclassified to hourly wage workers. Small businesses, nonprofits, and public sector employers will be especially impacted as they will have the hardest time finding more income to cover the increased labor costs, even if they will have a longer time to implement the new requirement.” (“Overtime Rule Will Burden Employers In Tepid Economy,” Press Release, 5/18/16)

ROB GREEN, National Council Of Chain Restaurants: “By dramatically increasing the wage threshold for determining a restaurant manager’s overtime eligibility, key management positions will be eliminated, restaurant employee career advancement will be derailed and workplace morale will plummet. If this outrageous regulation remains unchanged, chain restaurants will be forced to convert tens of thousands of managers from being salaried professionals to hourly status in order to avoid costly and unpredictable impacts.” (“Chain Restaurants Call New Overtime Rules ‘Outrageous,’” National Retail Federation, 5/17/16)

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Related Issues: Regulations, Economy, Jobs, Small Business