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Knight Pushes Back On Federal Overtime Rule

Congressman Says Proposed Department of Labor Policy Would Do More Harm Than Good

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Washington, DC, February 10, 2016 | comments

On Tuesday afternoon, Representative Steve Knight (CA-25), along with Representative Cresent Hardy (NV-4), formally criticized a federal proposal to alter the way salaried employees are compensated that he says will hurt American workers and the businesses that employ them.

In 2014, President Obama ordered the Department of Labor (DOL) to modify the portion of the Fair Labor Standards Act of 1938 that regulates overtime pay for non-hourly workers.  The next year, the DOL released a plan that would require businesses to pay overtime wages to employees who make $50,440 or less per year, which would be an unprecedented 113% increase over the previous threshold. In a letter to Labor Secretary Thomas Perez this week, Rep. Knight expressed serious concerns about the DOL’s plan, arguing that while this might sound like a good deal for workers, in reality it would result in cutbacks and job losses—especially for smaller companies and their employees.

“The belief that this rule change will increase millions of workers’ paychecks is simply shortsighted,” the letter states. “Unfortunately, a change of this magnitude is likely to have unintended consequences regarding how an employer compensates its employees, which would negatively affect workers.”

Rep. Knight points out several other major issues with the proposal.  The letter states that the policy change would force an unrealistic, one-size-fits-all requirement on businesses that disregards regional and economic differences across the country. It goes on to contend that the proposed rule’s ambiguous language would create confusion and burdensome compliance costs for companies, especially for small businesses and non-profit organizations that cannot absorb the costs of such an abrupt and dramatic policy change. As a result, they could be forced to shift salaried workers to hourly status or eliminating their positions altogether.

“The numbers just don’t add up. If this rule becomes final, many employers may be forced to choose between cutting their staff’s hours and benefits, or staying in business at all,” said Rep. Hardy.

“This policy is another example of Washington bureaucrats burdening our small businesses with one-size-fits-all regulations that hurt more workers than they help,” added Rep. Knight. 

The bipartisan letter was signed by 108 members of Congress. Additionally, it was endorsed by 14 outside industry groups that would be adversely affected by the rule change, including Associated General Contractors of America and the American Coalition of Engineering Companies. 

A copy of the letter can be found here.

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