In Case You Missed It

For months, employees, job creators, and policymakers have warned about the consequences of the Department of Labor’s overtime proposal. So far, these concerns are falling on deaf ears. Now, an independent office within the president’s own Small Business Administration is expressing concerns as well. In a letter to the department, the Office of Advocacy writes:

While small businesses support a modest increase in the salary threshold under the “white collar” FLSA exemption, DOL’s proposal more than doubles this salary threshold. Based on small business feedback, Advocacy believes that these changes will add significant compliance costs and paperwork burdens on small entities, particularly businesses in low wage regions and in industries that operate with low profit margins. Small businesses at our roundtables have told Advocacy that the high costs of this rule may also lead to unintended negative consequences for their employees that are counter to the goals of this rule.

In its letter, the nation’s small business advocate also notes the Department of Labor failed to “properly inform the public about the impact” of the proposed rule on small businesses:

Advocacy questions DOL’s analysis because it relies on multiple unsupported assumptions regarding the numbers of affected small businesses and workers … [It] analyzes small entities very broadly, not fully considering how the economic impact affects various categories of small entities differently.

According to the office, the department has not adequately taken into account the number of small businesses affected by the proposed rule, underestimates compliance costs, and does not consider less burdensome alternatives.

These small business concerns are troubling, but they’re not surprising. Others continue to raise similar concerns about a sweeping proposal that will:

• Limit workplace flexibility;
  
  
• Make it harder for workers to advance up the economic ladder; and
   
  
• Impose a significant regulatory burden on small businesses.
  
  

Still, the administration pushes forward. With great fanfare, President Obama vowed almost three years ago to “make sure that small business owners have their own seat at the table in our Cabinet meetings.” Now that the small business owners are speaking up, are the president and his administration listening?  

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