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More Responsible Wage and Hour Rules Would Empower Workers, Small Businesses

The Subcommittee on Workforce Protections, chaired by Rep. Bradley Byrne (R-AL), held a hearing this week to review federal rules implementing wage and hour protections and how they apply to the unique needs of today’s workforce. Members also discussed regulatory changes advanced by the Obama administration and the need for pro-growth solutions that empower working families and small businesses to succeed.

“The American people have clearly spoken, and they expect their leaders in Washington to put the country on a better path and finally get the economy moving again, which means more and better paying jobs,” Chairman Byrne said. “That’s why Republicans are committed to advancing a bold agenda that will remove barriers to job creation and empower more Americans to reach their full potential.”

Part of that effort is examining the Fair Labor Standards Act (FLSA), which impacts virtually every workplace in the country and establishes important protections for workers. However, the rules and regulations implementing the law are overly complex, burdensome, and outdated.

Christine Walters, an independent human resources consultant, explained how the law’s outdated regulatory structure creates challenges for small businesses and nonprofit organizations trying to serve their communities:

The FLSA was enacted toward the end of the Great Depression and reflects the realities of the industrial workplace of the 1930s, not the workplace of the 21st century. The Act itself has remained relatively unchanged in the nearly 80 years since its enactment, despite the dramatic changes that have occurred in where, when and how work is done.

Walters went on to explain how the law limits workplace flexibility for today’s workers. “The 21st century workforce and workplace are increasingly demanding workplace flexibility … The FLSA makes it difficult, if not impossible in many instances, for employers to provide workplace flexibility to millions of nonexempt employees.”

Small businesses are also struggling under a law designed for another era. Rhea Lana Riner did not set out to be an entrepreneur. But after inviting a few friends over to buy and sell their used children’s clothing, she had an idea to help other parents in need. That idea turned into a small children’s consignment business, and eventually 80 franchises that deliver important services for struggling families in 23 states.

Unfortunately, Riner is now one of many small business owners who have gotten tied up in the FLSA’s confusing maze of red tape. She testified how the law has forced her to confront costly litigation that could put her out of business:

Our business model is in peril because we have been drawn into an extended legal battle that is now in its sixth year ... Fighting an unfair regulatory order is a time-consuming and costly process for a small business. If we lose, Rhea Lana’s will no longer be able to provide its valuable service to families in need. DOL fines would put us out of business ... The Department of Labor has cost me precious dollars I could have used to grow my business. I have sacrificed my time, energy, and emotional strength fighting my own government for no reason.

Yet instead of working to streamline our nation’s wage and hour rules, the Obama administration issued a fundamentally flawed overtime rule that would make matters even worse for small businesses and their employees. It would also impose a significant burden on colleges and universities, ultimately hurting the students they serve.

Andy Brantley, president of the College and University Professional Association for Human Resources, testified, “The proposal generated widespread concern in the higher education community … [M]any institutions would need to both reduce services and raise tuition, to the detriment of students.” He went on to say:

We were deeply disappointed that DOL did not do more to address the concerns of colleges and universities across the country that submitted comments, wrote letters to Congress and met with administration officials.

Chairman Byrne also noted that the rule would cost the University of Alabama in his home state $17 million in just the first year. In closing, he reaffirmed Congress’ priority to ensure federal policies empower small businesses, workers, and students to succeed.

“We have a new administration that understands how misguided regulations often hurt the very individuals they’re intended to help,” Chairman Byrne said. “We also have a new Congress that is working to advance an agenda that will foster economic growth and deliver results for the American people. Bringing our nation’s wage and hour rules into the 21st century will be an important part of the conversation.”

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