Opinion Pieces

Small businesses across the nation could be forced to cut thousands of jobs and lose millions of dollars complying with federal regulations this year, and many of them have no idea. This is because the Department of Labor is quietly preparing to unveil a final rule that would radically alter the way companies must compensate salaried employees for overtime work. As well-intentioned as the policy might be, it will inevitably do far more harm than good by abruptly and arbitrarily changing the rules of the game for businesses and workers that have existed for decades.

Here’s what happened: In 2014, President Obama ordered the Department of Labor (DOL) to examine the portion of the Fair Labor Standards Act of 1938 that regulates overtime pay for non-hourly workers for possible modification. The next year, the DOL unveiled a plan that would require businesses to pay overtime wages to employees who make $50,440 or less per year. To put this in perspective, that is an unprecedented 113 percent increase in the previous overtime eligibility. This means small businesses that operated under the same expectations for years would suddenly need to dedicate themselves to understanding an entire new regime of regulations, and then recalculate their salary structures and business plans practically overnight. This would have the tragic (though all too familiar) consequences, which include spikes in compliance costs, across-the-board cutbacks, and eventual lay-offs. To make matters worse, this rule would have the same effect on colleges and non-profit organizations with salaried employees as well.

In an attempt to help American workers, bureaucrats in Washington, D.C. will ironically pull the rug out from beneath thousands of them. This is exactly the type of top-down, one-size-fits-all approach that I came to Congress to stop. That is why I teamed up with Congressman Cresent Hardy from Nevada to rally our colleagues in the House of Representatives and stop this rule change from moving forward. In February, we circulated a letter calling on the Secretary of Labor to reconsider due to the adverse impacts on small businesses and their employees that the rule would have. In March I hosted House Small Business Committee Chairman Steve Chabot in the district so he could speak with members of our community and discuss their concerns about the policy change.

Currently, the Department of Labor is recklessly plowing ahead despite rising opposition, and may put the policy into effect as soon as April.   Meanwhile, I am working with other members of Congress to pass legislation that would block the rule’s implementation until it is revised to meet the needs of the American people. Small businesses and their employees are the heart of our economy both locally and nationally. We cannot afford to stunt their growth by saddling them with rigid, illogical burdens that do more harm than good.