The House Committee on Education and the Workforce, chaired by Rep. John Kline (R-MN), held a
hearing today to examine the Department of Labor’s controversial overtime rule, which doubles the salary threshold under which employees qualify for overtime.
Concerns have been raised that the administration failed to streamline existing overtime regulations and
finalized a rule that will lead to fewer jobs, less workplace flexibility, and fewer opportunities to climb the economic ladder.
“This rule will disrupt the lives of countless individuals and do nothing to remove the regulatory landmines that are harmful to workers and employers,”
Chairman Kline said. “That’s what small business owners, college and university administrators, state and local officials, and heads of nonprofit organizations have warned about. But these warnings were ignored … The department ignored the voices of those who must implement this rule in their workplaces, on their campuses, and as they serve the needs of people in their communities.”
Fortunately, many of those voices were heard today as witnesses described the costly consequences of a rule that will negatively impact:
America's Workers
- “Easter Seals New Hampshire will need to reclassify 280 employees from salaried to nonexempt status … limiting career opportunities and reducing flexible work schedules that both attract our staff and enable us to provide certain services … The final rule will impact employees on a personal level …. Many staff members have expressed feelings of being demoted.” (Tina Sharby, chief human resources officer at Easter Seals New Hampshire)
- “Employees will work the same, they will earn the same, but they will lose the flexibility and be required to track their work in a way that they have not done previously … Teamwork, productivity, and morale will undoubtedly suffer,” and the rule will have “the perverse effect of forcing many employers to take away the benefits, job security, and opportunities for advancement for those employees who will lose exempt status.” (Alexander Passantino, partner at Seyfarth Shaw LLP)
- “A primary concern is that our centers will not be able to afford as many postdocs and will need to cut back on the number of research openings and opportunities that are available. A decrease in the number of postdocs may have a direct impact on the standing of the University of Kansas in the national higher education research community.” (Michael Rounds, associate vice president for Human Resources Management at the University of Kansas)
Vulnerable Americans
- “A program at significant risk is the Military and Veterans Services Coordination program. Services are provided around the clock to respond to emergency situations for our veterans and their families … Because of the potential cost for overtime, Easter Seals New Hampshire will be forced to limit the number of coverage hours for this already underfunded program, limiting our ability to provide around-the-clock care and lessening these lifesaving support services." (Tina Sharby, chief human resources officer at Easter Seals New Hampshire)
- "Another program that will be affected is the Special Education School which provides services to over 80 children … Easter Seals simply cannot afford to pay overtime and the children with disabilities that we serve are the ones who will suffer the most.” (Tina Sharby, chief human resources officer at Easter Seals New Hampshire)
Younger Americans
- “It is inevitable that there will be a significant reduction in the services currently being provided by the University of Kansas units to students as we transition employees from their current exempt to non-exempt status without the flexibility of working more than 40 hours per week regardless of mission demands." (Michael Rounds, associate vice president for Human Resources Management at the University of Kansas)
- "It is probable … that tuition will ultimately be pushed higher in future years in order to address the enduring impacts of the new overtime rule … There is simply no way for universities like the University of Kansas to absorb costs of this magnitude without an impact on our academic, research, and outreach missions that will be felt by the public we serve.” (Michael Rounds, associate vice president for Human Resources Management at the University of Kansas)
Small Businesses
- “The rule will directly impact budgets and operations of nonprofits such as mine, as well as … small businesses … These employers will be unable to absorb such a massive increase in payroll and labor costs." (Tina Sharby, chief human resources officer at Easter Seals New Hampshire)
- “Regulatory familiarization, adjustment, and managerial costs will be significant for all employers. Perversely, however, these costs may be more significant for those organizations that can least afford it, such as small businesses … These organizations have the least discretion in their budgets and, in many ways, they will need to be the most creative in developing solutions.” (Alexander Passantino, partner at Seyfarth Shaw LLP)
Rep. Tim Walberg (R-MI), who
introduced legislation earlier this year to ensure a more responsible update to federal overtime rules,
summed up the consequences for workers, students, nonprofits, and small businesses: “The bottom line is that this rule hurts the very individuals the administration claims it will help.”
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