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Field Hearing Explores How Outdated Labor Regulations Impact the Modern Workforce

The Subcommittee on Workforce Protections, chaired by Rep. Tim Walberg (R-MI), held a field hearing in Lansing, Michigan, this week to explore how current regulations implementing federal wage and hour standards are impacting workplaces in the state and across the country. Witnesses offered a variety of perspectives on challenges related to the current regulatory structure, concerns regarding the administration’s regulatory agenda, and ideas for better meeting the needs of American workers and job creators.
 
“For almost 80 years, the Fair Labor Standards Act has been the foundation of our wage and hour standards,” Chairman Walberg said. “The problem is that a lot has changed in our workplaces over the 80 years, and federal wage and hour rules have not kept up. Today, the regulations guiding the law’s implementation are rigid, outdated, and simply not working for the 21st century workforce.” Rep. Mike Bishop (R-MI) agreed, adding that current rules and regulations are “too complex, burdensome, and outdated” and “no longer provide the kind of protections and opportunities they could—and should—for workers and employers.”
 
Witnesses shared similar concerns, noting ways in which current regulations restrict workplace flexibility, innovation, and opportunity, and fail to meet the needs of the modern workforce.
 
“The American economy is changing, and millennials’ attitudes about work and their careers are changing with it,” explained Jared Meyer, a fellow at the Manhattan Institute for Policy Research who specializes in the economic challenges facing millennials. “The rapid rise of the so-called ‘sharing economy’ embodies many young Americans’ new economic ideal—one driven by technology, convenience, and flexibility. However, government policy, particularly in regards to labor regulation, ignores the realities of a 21st century economy and continues to hold back millennials’ economic opportunities.”
 
Nancy McKeague, senior vice president and chief of staff at the Michigan Health & Hospital Association, described how the complex and confusing regulatory structure governing federal wage and hour standards creates problems for nonprofit organizations like hers. “Working to comply with the [Fair Labor Standards Act] can create high legal costs for employers, which is particularly difficult for the nonprofit sector with tighter budgets,” she explained. “Simply stated, more confusion from Washington and increased litigation … leads to less funding for a nonprofit’s core mission, whether this is providing patient treatment, caring for children, or conducting research.”

However, while most witnesses agreed that rules and regulations need to be updated, they shared concerns with how the administration is attempting to do so, focusing primarily on the Department of Labor’s overtime proposal. As McKeague noted, the proposal would “present challenges for employers whose salaries tend to be lower, such as small employers, nonprofits, employers in certain industries, and employers in lower cost-of-living areas.” She added that the proposed changes will also limit the workplace flexibility that allows employees to meet work-life needs.

McKeague also voiced support for the Protecting Workplace Advancement and Opportunity Act, which was recently introduced in the House by Chairman Walberg and Education and the Workforce Committee Chairman John Kline (R-MN). She explained that while the legislation “does not prevent [the department] from moving forward with changes to the overtime regulations,” it does require the department to “perform an economic analysis of how changes to overtime regulations will impact nonprofits, small businesses, and employers in other industry sectors before issuing a new rule.”
 
One of those sectors includes higher education. Laurita Thomas, associate vice president for Human Resources at the University of Michigan, detailed the impact of the department’s overtime changes on colleges and universities and “the ripple effects they could have on the cost of tuition, job security, and part-time employees, among others.” Thomas explained those effects would include reduced autonomy, fewer flexible work arrangements, and increased costs.

“The climate for most colleges and universities in the U.S. is one of ongoing financial pressures that would curtail hiring new employees or increasing compensation as a result of [these changes],” Thomas said. She added that changes “must be done with recognition of differences in jobs and economic sectors to avoid unintended consequences that could harm both universities and the employees these rules are intended to protect.”

Addressing concerns related to these consequences, Rep. Bishop noted, “Here in Michigan, we’re very fortunate to have an abundance of incredible universities that serve students from our state and from states across the country … Under no circumstances should we be making it harder and more costly for students at these universities—or any university—to receive a quality education. Americans deserve better than changes that lead to these kinds of consequences.”

“It’s not enough to simply change the rules. We have to improve them; and we have to do so in a way that does not place additional burdensome requirements on small business owners, does not stifle job creation and wages, and does not limit opportunity and flexibility for workers,” Chairman Walberg said. “There are better ways to update and modernize current rules and regulations, and we owe it to the American people to explore them.”

 

  
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