[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]
RESTORING THE VALUE OF WORK:
EVALUATING DOL'S EFFORTS TO UNDERMINE
STRONG OVERTIME PROTECTIONS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
COMMITTEE ON EDUCATION
AND LABOR
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JUNE 12, 2019
__________
Serial No. 116-28
__________
Printed for the use of the Committee on Education and Labor
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: www.govinfo.gov
or
Committee address: https://edlabor.house.gov
___________
U.S. GOVERNMENT PUBLISHING OFFICE
36-907 PDF WASHINGTON : 2020
COMMITTEE ON EDUCATION AND LABOR
ROBERT C. ``BOBBY'' SCOTT, Virginia, Chairman
Susan A. Davis, California Virginia Foxx, North Carolina,
Raul M. Grijalva, Arizona Ranking Member
Joe Courtney, Connecticut David P. Roe, Tennessee
Marcia L. Fudge, Ohio Glenn Thompson, Pennsylvania
Gregorio Kilili Camacho Sablan, Tim Walberg, Michigan
Northern Mariana Islands Brett Guthrie, Kentucky
Frederica S. Wilson, Florida Bradley Byrne, Alabama
Suzanne Bonamici, Oregon Glenn Grothman, Wisconsin
Mark Takano, California Elise M. Stefanik, New York
Alma S. Adams, North Carolina Rick W. Allen, Georgia
Mark DeSaulnier, California Francis Rooney, Florida
Donald Norcross, New Jersey Lloyd Smucker, Pennsylvania
Pramila Jayapal, Washington Jim Banks, Indiana
Joseph D. Morelle, New York Mark Walker, North Carolina
Susan Wild, Pennsylvania James Comer, Kentucky
Josh Harder, California Ben Cline, Virginia
Lucy McBath, Georgia Russ Fulcher, Idaho
Kim Schrier, Washington Van Taylor, Texas
Lauren Underwood, Illinois Steve Watkins, Kansas
Jahana Hayes, Connecticut Ron Wright, Texas
Donna E. Shalala, Florida Daniel Meuser, Pennsylvania
Andy Levin, Michigan* William R. Timmons, IV, South
Ilhan Omar, Minnesota Carolina
David J. Trone, Maryland Dusty Johnson, South Dakota
Haley M. Stevens, Michigan
Susie Lee, Nevada
Lori Trahan, Massachusetts
Joaquin Castro, Texas
* Vice-Chair
Veronique Pluviose, Staff Director
Brandon Renz, Minority Staff Director
------
SUBCOMMITTEE ON WORKFORCE PROTECTIONS
ALMA S. ADAMS, North Carolina, Chairwoman
Mark DeSaulnier, California Bradley Byrne, Alabama,
Mark Takano, California Ranking Member
Pramila Jayapal, Washington Francis Rooney, Florida
Susan Wild, Pennsylvania Mark Walker, North Carolina
Lucy McBath, Georgia Ben Cline, Virginia
Ilhan Omar, Minnesota Ron Wright, Texas
Haley M. Stevens, Michigan
C O N T E N T S
----------
Page
Hearing held on June 12, 2019.................................... 1
Statement of Members:
Adams, Hon. Alma S., Chairwoman, Subcommittee on Workforce
Protections................................................ 1
Prepared statement of.................................... 3
Byrne, Hon. Bradley, Ranking Member, Subcommittee on
Workforce Protections...................................... 5
Prepared statement of.................................... 6
Statement of Witnesses:
Babcock-Stiner, Ms. Anne R. Esq., Senior Vice President of
Human Resources, Pathstone Corporation..................... 19
Prepared statement of.................................... 21
McCutchen, Ms. Tammy D., Esq., Principal, Littler Mendelson
PC......................................................... 28
Prepared statement of.................................... 30
Winebrake, Mr. Pete, Managing Partner, Winebrake and Santilo,
LLC, Dresher, PA........................................... 41
Prepared statement of.................................... 43
Shierholz, Dr. Heidi., Ph.D.,Senior Economist and Director of
Policy, Economic Policy Institute.......................... 8
Prepared statement of.................................... 11
Additional Submissions:
Chairwoman Adams:
Prepared statement from the National Employment Law
Project (NELP)......................................... 164
Letter dated May 21, 2019 from the National Employment
Law Project (NELP)..................................... 164
Letter from College and University Professors............ 180
Mr. Byrne:
Letter dated May 20, 2019 from the American Hotel and
Lodging Association (AHLA)............................. 200
Letter dated May 21, 2019 from Society for Human Resource
Management (SHRM)...................................... 284
Letter dated June 12, 2019 from the American Hotel and
Lodging Association (AHLA)............................. 206
Letter dated June 12, 2019 from the International
Franchise Association (IFA)............................ 293
Prepared statement from McCutchen, Ms. Tammy D........... 307
Prepared statement from the College and University
Professional Association for Human Resources (cupa-hr). 207
Letter from the College and University Professional
Association for Human Resources (cupa-hr)
DeSaulnier, Hon. Mark, a Representative in Congress from the
State of California:
Letter dated May 21, 2019 from State Attorney Generals... 131
Jayapal, Hon. Pramila, a Representative in Congress from the
State of Washington:
Letter dated May 21, 2019 from the State of Washington
Office of the Governor................................. 124
Article: Punching In Legal Drama for Labor Department.... 127
Omar, Hon. Ilhan, a Representative in Congress from the State
of Minnesota:
Letter dated May 21, 2019 from The American Federation of
labor and Congress of Industrial Organizations (AFL-
CIO)................................................... 100
Takano, Hon. Mark, a Representative in Congress from the
State of California:
Letter dated June 8, 2016 from the Economic Policy
Institute.............................................. 57
Report: More Than Eight Million Workers Will Be Left
Behind By The Trump Overtime Proposal.................. 65
Stevens, Hon. Haley M., a Representative in Congress from the
State of Michigan:
Letter date May 17, 2019 from the State of Michigan
Office of the Governor................................. 89
Letter date May 21, 2019 from AARP....................... 91
Wild, Hon. Susan, a Representative in Congress from the State
of Pennsylvania:
Letter from the Department of Labor and Industry......... 84
Questions submitted for the record
Responses to questions submitted for the record by:
Dr. Shierholz............................................ 312
Mr. Winebrake............................................ 313
RESTORING THE VALUE OF WORK:
EVALUATING EVALUATING DOL'S EFFORTS
TO UNDERMINE STRONG OVERTIME PROTECTIONS
----------
Wednesday, June 12, 2019
House of Representatives,
Subcommittee on Workforce Protections,
Committee on Education and Labor,
Washington, DC.
----------
The subcommittee met, pursuant to notice, at 10:17 a.m., in
room 2175, Rayburn House Office Building, Hon. Alma Adams
[chairwoman of the subcommittee] presiding.
Present: Representatives Adams, DeSaulnier, Takano,
Jayapal, Wild, McBath, Omar, Stevens, Scott (ex officio),
Byrne, Walker, Cline, and Foxx (ex officio).
Also present: Representative Morelle.
Staff present: Tylease Alli, Chief Clerk; Ilana Brunner,
General Counsel, Health and Labor; Emma Eatman, Press
Assistant; Eli Hovland, Staff Assistant; Eunice Ikene, Labor
Policy Advisor; Stephanie Lalle, Deputy Communications
Director; Jaria Martin, Staff Assistant; Richard Miller,
Director of Labor Policy; Max Moore, Office Aide; Udochi
Onwubiko, Labor Policy Counsel; Veronique Pluviose, Staff
Director; Banyon Vassar, Deputy Director of Information
Technology; Joshua Weisz, Communications Director; Rachel West,
Senior Economic Policy Advisor; Cyrus Artz, Minority
Parliamentarian; Courtney Butcher, Minority Coalitions and
Members Services Coordinator; Cate Dillon, Minority Staff
Assistant; Rob Green, Minority Director of Workforce Policy;
Bridget Handy, Minority Communications Assistant; John Martin,
Minority Workforce Policy Counsel; Sarah Martin, Minority
Professional Staff Member; Kelley McNabb, Minority
Communications Director; Brandon Renz, Minority Staff Director;
Ben Ridder, Minority Legislative Assistant; Meredith Schellin,
Minority Deputy Press Secretary and Digital Advisor; and
Heather Wadyka, Minority Staff Assistant.
Chairwoman Adams. The Subcommittee on Workforce Protections
will come to order.
Welcome, everyone. I note that a quorum is present.
Representative Joe Morelle of New York will be
participating in today's hearing, with the understanding that
his questions will come only after all members of the Workforce
Protection Subcommittee on both sides of the aisle who are
present have an opportunity to question the witnesses.
Without objection, so ordered.
The subcommittee is meeting today in an oversight and
legislative hearing to hear testimony on evaluating the
Department of Labor's efforts to undermine strong overtime
protections.
Pursuant to committee rule 7(c), opening statements are
limited to the chair and ranking member. This allows us to hear
from our witnesses sooner and provides all members with
adequate time to ask questions.
I now recognize myself for the purpose of making an opening
statement.
Today, we will discuss the importance of strong overtime
pay protections for American workers. Since the passage of the
Fair Labor Standards Act in 1938, Congress has guaranteed basic
overtime protections by requiring certain workers to be paid 1-
1/2 times their regular rate of pay for any hours worked over
40 in a workweek.
As our witnesses will discuss, strong overtime protections
help achieve three key goals. They protect workers from being
forced to work excessive hours; they ensure that working extra
time comes with extra pay; and they encourage employers to hire
more employees rather than overwork current employees.
Unfortunately, due to weak overtime standards, some
employers are relying on a business model that shifts extra
work normally done by workers with overtime protections to
workers without overtime protections. This leaves some salaried
workers who should be eligible for overtime working 50- and 60-
hour weeks without additional pay and other workers with too
few hours.
While growing income inequality and the declining power of
workers have only reinforced the need for strong overtime
protections, the Federal Government has repeatedly failed to
properly update overtime standards to keep pace with the
economy.
Under fair standard--under Fair Labor Standards Act
regulations, salaried workers who earn below a salary level
established by the Department of Labor are automatically
eligible for overtime pay.
In 1975, the Department of Labor set the salary level to
$13,000 per year. That was equivalent to almost $58,000 a year
when translated into 2020 dollars. At that salary level, over
60 percent of full-time salaried workers were eligible for
overtime pay based on their salaries alone.
Twenty-nine years later, in 2004, the Department of Labor,
under the Bush Administration, set the salary level to $23,660
a year. This is equivalent of about $33,000 a year in 2020. The
salary level covered only about 13 percent of the full-time
salaried work force in 2004, compared with 60 percent back in
1975. This salary threshold was developed using a flawed
methodology.
Over the next decade, failure to update the salary level
meant more and more workers were without overtime protections.
In 2016, the $23,600-a-year salary level covered fewer than
7 percent of the full-time salaried work force.
Recognizing this harmful trend, the Obama Administration
finalized a rule to raise the salary level to roughly $47,500
in 2016. This long overdue update would have extended overtime
protections for 4.2 million workers, restored overtime
protections to one-third of the full-time salaried work force,
put $1.2 billion into the pockets of lower-and middle-wage
workers, and established automatic updates to prevent another
lapse in overtime protections.
In 2020, the salary level would have been approximately
$51,000 a year. Unfortunately, a flawed district court ruling
blocked the Department from implementing and enforcing the
rule. Rather than defending the Obama-era overtime update in
court, the Department of Labor is now proposing a new lower
salary level of about $35,000 a year to take effect in 2020.
The Trump administration's proposed salary level, based on
a flawed methodology first used in 2004, would cover only 15
percent of full-time salaried workers compared to the 33
percent that would have been covered under the Obama rule. It
would leave 8.2 million workers behind and deny American
workers more than $1.2 billion in additional pay.
The new proposal also fails to include automatic updates to
the salary level, leaving salaried workers vulnerable to, once
again, losing overtime protections in the foreseeable future.
After more than 40 years, without an adequate update to the
overtime rule, the Trump administration's proposals falls well
short of what workers deserve. Despite the President's promise
to fight for American workers, his administration continues to
block Federal policies that would lift working families into
the middle class. Congressional Democrats stand ready to
protect workers where the administration fails to do so.
The Restoring Overtime Pay Act, H.R. 3197, introduced by
Congressman Mark Takano, would codify the strong salary
threshold set in the 2016 final rule and require automatic
updates every 3 years to ensure the level remains in line with
overall increases in workers' wages.
Restoring workers' access to strong overtime protections,
raising the Federal minimum wage, and protecting workers' right
to join a union are Federal policies that would improve
standards of living and stimulate local economies across the
country. These three pillars are essential labor market
institutions upon which working people rely. However, the Trump
administration continues to oppose each of these efforts to
give hardworking Americans a raise.
Today's hearing is an opportunity to examine the Federal
Government's responsibility to restore overtime protections for
millions of workers. It is also a chance to discuss the
importance of building an economy that works for all Americans,
not just the wealthy few.
I want to thank all of our witnesses for being here today,
and I look forward to your testimony.
I now recognize the distinguished ranking member for the
purpose of making an opening statement.
[The statement of Chairwoman Adams follows:]
Prepared Statement of Hon. Alma S. Adams, Chairwoman, Subcommittee on
Workforce Protections
Today, we will discuss the importance of strong overtime pay
protections for American workers.
Since the passage of the Fair Labor Standards Act in 1938, Congress
has guaranteed basic overtime protections by requiring certain workers
be paid one-and-a-half times their regular rate of pay for any hours
worked over 40 in a workweek.
As our witnesses will discuss, strong overtime protections help
achieve three key goals:
They prevent workers from being forced to work excessive hours,
They ensure that working extra time comes with extra pay, and
They encourage employers to hire more employees rather than
overwork current employees.
Unfortunately, due to weak overtime standards, some employers are
relying on a business model that shifts extra work normally done by
workers with overtime protections to workers without overtime
protections.
This leaves some salaried workers--who should be eligible for
overtime--working 50-and 60-hour weeks without any additional pay and
other workers with too few hours.
While growing income inequality and the declining power of workers
have only reinforced the need for strong overtime protections, the
Federal Government has repeatedly failed to properly update overtime
standards to keep pace with the economy.
Under Fair Labor Standard Act regulations, salaried workers who
earn below a salary level established by the DOL are automatically
eligible for overtime pay.
In 1975, the Department of Labor set the salary level to $13,000
per year.
That was equivalent to almost $58,000 a year when translated into
2020 dollars.
At that salary level, over 60 percent of full-time, salaried
workers were eligible for overtime pay based on their salaries alone.
Twenty-nine years later in 2004, the Department of Labor under the
Bush Administration set the salary level to $23,660 a year.
This is the equivalent of about $33,000 a year in 2020.
This salary level covered only about 13 percent of the full-time,
salaried work force in 2004, compared with 60 percent back in 1975.
This salary threshold was developed using a flawed methodology.
Over the next decade, failure to update the salary level meant more
and more workers were without overtime protections.
In 2016, the $23,660 a year salary level covered fewer than 7
percent of the full-time, salaried work force. Recognizing this harmful
trend, the Obama Administration finalized a rule to raise the salary
level to roughly $47,500 in 2016.
This long-overdue update would have:
Extended overtime protections for 4.2 million workers,
Restored overtime protections to one-third of the full-time,
salaried work force,
Put $1.2 billion into the pockets of lower-and middle-wage workers,
and
Established automatic updates to prevent another lapse in overtime
protections.
In 2020, the salary level would have been approximately $51,000 a
year.
Unfortunately, a flawed district court ruling blocked the
Department from implementing and enforcing the rule.
Rather than defending the Obama-era overtime update in court, the
Department of Labor is now proposing a new, lower salary level of about
$35,000 a year to take effect in 2020.
The Trump administration's proposed salary level, based on a flawed
methodology first used in 2004, would cover only 15 percent of full-
time, salaried workers compared to the 33 percent that would have been
covered under the Obama-era rule.
It would leave 8.2 million workers behind and deny American workers
more than $1.2 billion in additional pay.
The new proposal also fails to include automatic updates to the
salary level, leaving salaried workers vulnerable to once again losing
overtime protections in the foreseeable future.
After more than 40 years without an adequate update to the overtime
rule, the Trump administration's proposal falls well short of what
workers deserve.
Despite the president's promise to fight for American workers, his
administration continues to block Federal policies that would lift
working families into the middle class.
Congressional Democrats stand ready to protect workers where the
Administration fails to do so.
The Restoring Overtime Pay Act, H.R. 3197, introduced by
Congressman Mark Takano, would codify the strong salary threshold set
in the 2016 final rule and require automatic updates every 3 years to
ensure the level remains in line with overall increases in workers'
wages.
Restoring workers' access to strong overtime protections, raising
the Federal minimum wage, and protecting workers' right to join a union
are Federal policies that would improve standards of living and
stimulate local economies across the country.
These three pillars are essential labor market institutions upon
which working people rely.
However, the Trump administration continues to oppose each of these
efforts to give hardworking Americans a raise.
Today' s hearing is an opportunity to examine the Federal
Government's responsibility to restore overtime protections for
millions of workers.
It is also a chance to discuss the importance of building an
economy that works for all Americans, not just the wealthy few.
I want to thank all of our witnesses for being with us today and I
look forward to your testimony. I now yield to the Ranking Member, Mr.
Byrne for his opening statement.
______
Mr. Byrne. Thank you, Madam Chairwoman.
And hello and welcome to all of the witnesses that are
here.
After clocking 40 hours of work, there are few incentives
as attractive as overtime pay to motivate an individual to come
back for more that week. The Department of Labor should make
sure those entitled to overtime pay receive it, and the
proposed overtime rule from the Department of Labor will help
ensure that. But my colleagues on the other side of the gavel
aren't hearing it.
This spring, the Department of Labor published a notice of
proposed rulemaking in the Federal Register which raised the
annual salary threshold to be exempt from overtime pay by over
$11,000. This rule would make over 1 million additional
American workers eligible for overtime pay. One million.
So when I see the label for this hearing where it says
DOL's efforts to undermine strong overtime protections, I see 1
million reasons why that statement is untrue.
For some reason, this sensible proposal to modernize the
overtime pay salary threshold doesn't make my friends on the
other side happy. Rather than welcoming this exceptional
opportunity, they would rather wallow in their partisan
opposition to President Trump and oppose any and every policy
coming out of his administration, even when the policies are as
reasonable as this one.
We are here today because of stunts in political point
scoring, the other side insists on revisiting the radical and
discredited Obama-era overtime rule, which everyone should
recall was invalidated in a U.S. District Court. The Obama rule
was invalidated in a U.S. District Court.
The Obama rule proposed to hike the threshold for exemption
from overtime pay by over 100 percent to a salary of almost
$50,000. As the court wrote in its decision invalidating the
rule, quote, The Department has exceeded its authority and gone
too far with the final rule, close quote. A Federal district
court said that.
In addition to being excessive, misguided, and unworkable,
this spike wasn't projected to help workers in the long run.
Young Americans would have been particularly harmed by the rule
because it would have increased college costs and made it
harder for graduates to begin their careers.
We heard from a number of universities in the past two or 3
years that it would decimate their ability to offer services to
college students. And that is one of the most important things
we deal with on this committee, is education.
The Obama scheme would have resulted in fewer job
prospects, less flexibility in the workplace, and less
opportunity to move up the economic ladder. Small businesses,
nonprofit employers, colleges and universities, and the people
all these American institutions serve, would have been hit the
hardest by the Obama Administration's rule. That is ironic
considering we presumably work on this committee to promote and
protect these very sectors of our country.
I want to remind my colleagues on the other side that the
Department of Labor reached its salary threshold in the
proposed rule using the same sound methodology as the Bush
Administration did in 2004, which set the current minimum that
we use today, $23,660. It is entirely reasonable and, indeed,
wise in this time of economic growth to look at what has worked
before. Instead of rebelling in political outcry, we would all
serve America's middle-class workers well to take a step back
and be objective about this.
Times have changed and the economy along with it. And this
proposed rule is a responsible, reasonable, and workable answer
in keeping with the purpose and historical level of the
overtime salary threshold, and most importantly, in affirming
the value of every American worker.
Madam Chairwoman, to you and to everybody who is here
today, I am going to offer my apologies. I am on another
committee, the Armed Services Committee. We are marking up the
National Defense Authorization Act today, and it may very well
be that I get up and leave before the hearing is over to go
vote in that committee. I am not angry. I am not put out. I
really would rather be here. But I think it is important that I
have my vote over there. So, I want you to understand that I
will be back as quickly as I can if that occurs.
And with that, I yield back.
[The statement of Mr. Byrne follows:]
Prepared Statement of Hon. Bradley Byrne, Ranking Member, Subcommittee
on Subcommittee on Workforce Protections
Thank you for yielding.
After clocking 40 hours of work, there are few incentives as
attractive as overtime pay to motivate an individual to come back for
more that week. The Department of Labor should make sure those entitled
to overtime pay receive it, and the proposed overtime rule will help
ensure that. But my colleagues on the other side of the gavel aren't
hearing it.
This spring, the DOL published a Notice of Proposed Rulemaking in
the Federal Register, which raised the annual salary threshold to be
exempt from overtime pay by over $11,000. This rule would make over one
million additional American workers eligible for overtime pay. One
million.
For some reason, this sensible proposal to modernize the overtime
pay salary threshold doesn't make Democrats happy. Rather than
welcoming this exceptional opportunity, they would rather wallow in
their partisan opposition to President Trump and oppose any and every
policy coming out of this administration, even when the policies are as
reasonable as this one. We're here today because, in stunts of
political point-scoring, Democrats insist on revisiting the radical and
discredited Obama-era overtime rule, which everyone should recall, was
invalidated in a U.S. District Court.
The Obama rule proposed to hike the threshold for exemption from
overtime pay by over 100 percent to a salary of almost $50,000. As the
court wrote in its decision invalidating the rule: ``The Department has
exceeded its authority and gone too far with the Final Rule.'' In
addition to being excessive, misguided, and unworkable, this spike
wasn't projected to help workers in the long run. Young Americans would
have been particularly harmed by the rule, because it would have
increased college costs and made it harder for graduates to begin their
careers. The Obama scheme would have resulted in fewer job prospects,
less flexibility in the workplace, and less opportunity to move up the
economic ladder.
Small businesses, non-profit employers, colleges and universities,
and the people all these American institutions serve would have been
hit the hardest by the Obama Administration's rule. That's ironic,
considering we presumably work on this committee to promote and protect
those very sectors of our country.
I want to remind my Democrat colleagues that the DOL reached its
new salary threshold in the proposed rule using the same sound
methodology as the Bush Administration in 2004, which set the current
minimum that we use today: $23,660. It is entirely reasonable and,
indeed, wise in this time of economic growth to look at what has worked
before. Instead of rebelling in political outcry, we would all serve
American middle-class workers well to take a step back and be objective
about this.
Times have changed and the economy along with it, and this proposed
rule is a responsible, reasonable, and workable answer in keeping with
the purpose and historical level of the overtime salary threshold and
most importantly, in affirming the value of every American worker.
Thank you.
______
Chairwoman Adams. Thank you. Thank you very much.
Without objection, all of the members who wish to insert
written statements into the record may do so by submitting them
to the committee clerk electronically in Microsoft Word format
by 5 p.m. on Tuesday, June 25.
I will now introduce our witnesses.
Dr. Heidi Shierholz is Senior Economist and Director of
Policy at the Economic Policy Institute. Dr. Shierholz
previously served as Chief Economist to the U.S. Secretary of
Labor under Secretary Thomas Perez.
Ms. Tammy McCutchen is a Principal in Littler Mendelson's
Washington, DC. office. Ms. McCutchen previously served as
Administrator of the Wage and Hour Division of the U.S.
Department of Labor.
Mr. Pete Winebrake is the Founder and Managing Partner of
Winebrake and Santillo, LLC, based in Dresher, Pennsylvania.
Mr. Winebrake has litigated hundreds of wage and overtime
lawsuits in courts throughout the United States.
I am pleased now to recognize my colleague, Representative
Morelle, to briefly introduce his constituent who is appearing
before us as a witness today.
Mr. Morelle. Thank you, Madame Chairwoman, for the courtesy
to a nonmember of the subcommittee, allowing me a moment to
introduce my constituent.
I am pleased to welcome to this Workforce Protection
Subcommittee, Ms. Anne Babcock-Stiner. Anne is an attorney and
the Senior Vice President of Human Resources for PathStone
Corporation, a not-for-profit community development
organization in my district of Rochester, New York. She
previously served as a Deputy Attorney General for the Indiana
Attorney General's Homeowner Protection Unit. In her capacity
at PathStone, Ms. Babcock-Stiner has provided comprehensive
holistic services to those in need from work force development
initiatives, education, and health services, to ensuring safe,
stable housing.
PathStone helps create opportunities for individuals and
families throughout our community. I am so grateful to
PathStone for their many contributions to our community and for
their continued commitment to advocating for stronger worker
protections, and I am particularly delighted to have Ms.
Babcock-Stiner here today.
And I would ask my colleagues also to note that she is
spending her birthday with us, and I wish her all the best
wishes on another safe trip around the sun.
So happy birthday.
And thank you, Madame Chair.
Chairwoman Adams. And thank you.
And happy birthday.
We appreciate all of the witnesses for being here today and
look forward to your testimony.
Let me remind the witnesses that we have read your written
statements, and they will appear in full in the hearing record.
Pursuant to committee rule 7(d) and committee practice,
each of you is asked to limit your oral presentation to a 5-
minute summary of your written statement.
And let me remind the witnesses that pursuant to title 18
of the U.S. Code, section 1001, it is illegal to knowingly and
willfully falsify any statement, representation, written
document, or material fact presented to Congress, or otherwise
conceal or cover up material fact.
Before you begin your testimony, please remember to press
the button on the microphone in front of you so that it will
turn on and the members can hear you. As you begin to speak,
the light in front of you will turn green. After 4 minutes, the
light will turn yellow to signal that you have 1 minute
remaining. When the light turns red, your 5 minutes have
expired, and we ask that you would please wrap up your
testimony.
We will let the entire panel make their presentations
before we move to member questions. When answering a question,
please remember to, once again, turn your microphone on.
I am going to first recognize Dr. Shierholz.
STATEMENT OF HEIDI SHIERHOLZ, PH.D., SENIOR ECONOMIST AND
DIRECTOR OF POLICY, ECONOMIC POLICY INSTITUTE
Ms. Shierholz. Chair Adams, Ranking Member Byrne, and
members of the subcommittee, thank you very much for the
opportunity to testify here today.
The overtime protections of the Fair Labor Standards Act
are a crucial part of a vibrant middle class because they give
employers the incentive to hire more workers rather than
overwork existing employees, and they ensure that workers are
fairly compensated when they are asked to work long hours.
In the Fair Labor Standards Act, Congress provided overtime
protections to most workers, but directed the Secretary--the
Secretary of Labor to exempt a limited number of well-paid,
bona fide managers, executives, or highly trained
professionals, since these workers command enough bargaining
power, enough control over their own work and schedules that
they don't actually need the protections.
For an employee to be exempt from overtime protections
under this exemption, they must earn a salary, they must pass
the duties test based on the actual work that they do, and they
must earn above the salary threshold.
The salary threshold can best be thought of as a bright-
line proxy for the duties test that simplifies the
determination of exemption, it helps ensure that frontline
supervisors who get relatively low pay and have little
bargaining power are not taken advantage of, and it reduces the
misclassification of nonexempt workers as exempt.
In 2016, the Department finalized an overtime rule
following an exhaustive rulemaking process. That rule increased
the salary threshold to roughly $47,000, which is the 40th
percentile of earnings of full-time salaried workers in the
lowest wage census region.
However, a single district court judge in Texas held the
rule to be invalid. And instead of defending this rigorously
determined rule, the Department, under the current
administration, has proposed a new rule with a much lower
threshold. The Department's current threshold set--current
proposal sets the threshold at roughly $35,000 in 2020, which
is essentially the 20th percentile of earnings of full-time
salaried workers in the lowest wage census region. So this is
the same methodology that was used in the 2004 rule.
Unfortunately, the methodology in the 2004 rule was
fundamentally flawed.
So historically, the Department sets tests for overtime
eligibility in one of two ways. It pairs a low salary
threshold, which covers few workers, with a strong duties test,
which covers more workers, or it pairs a strong--a high salary
threshold, which covers more workers, with a weak duties test,
which covers fewer workers.
Both of those options create the intended balance. But in
2004, the Department paired a low salary threshold with a weak
duties test. And because of this erroneous mismatch, the
methodology from the 2004 rule departs from decades of
historical precedent and is fundamentally inappropriate.
In 2016, the Department corrected this error by keeping the
same lenient duties test that was used in the 2004 rule but
correctly pairing it with a higher salary threshold. In fact,
in 2016, the Department picked nearly the lowest possible
threshold, consistent with historic precedent.
According to the methodology that was used to calculate the
thresholds from 1958 until the 2004 error, the Department
should have set the threshold in 2016 somewhere between $46,000
and $65,000. They chose $47,000.
So, a key thing this highlights is that while the increase
in the threshold in the 2016 rule was large, it was only
because it had been over 40 years since the threshold had been
appropriately updated.
At its core, the Department's proposal is based on the
notion that someone making $35,000 a year is a well-paid
executive who does not need or deserve overtime protections.
My analysis, which uses the exact same methodology that DOL
does to look at their impact, finds that 8.2 million workers
who would have benefited from the 2016 rule will be left behind
by the Department's proposal. That includes 4.2 million women,
3.0 million people of color, and 2.7 million parents of
children under the age of 18. And together, workers will lose
$1.2 billion annually.
Congress should step in and pass the Restoring Overtime Pay
Act, which codifies the 2016 rule as a floor and upholds the
purpose of the overtime provisions of the Fair Labor Standards
Act.
Thank you.
[The statement of Ms. Shierholz follows:]
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Chairwoman Adams. Thank you very much.
Ms. Babcock-Stiner, you are recognized for 5 minutes.
STATEMENT OF ANNE BABCOCK-STINER, SENIOR VICE PRESIDENT OF
HUMAN RESOURCES, PATHSTONE CORPORATION
Ms. Babcock-Stiner. Thank you, Chairwoman Adams, Ranking
Member Byrne, and other members of the subcommittee, for the
opportunity to present at today's hearing.
My name is Anne Babcock-Stiner, and I am the Senior Vice
President of Human Resources at PathStone Corporation, a New
York-based nonprofit with a mission of building economic self-
sufficiency for families and communities. I am honored to be
here representing an employer that has a rich history of
advocating for strong worker protections.
PathStone has about 600 employees in seven different States
and in Puerto Rico, who serve more than 41,000 individuals each
year through our work force, community and housing development
programs.
Back in 2016 when the Department of Labor proposed raising
the salary threshold to $47,476, PathStone was compelled to
conduct a mission-based analysis to determine what this would
mean for our constituents and for our employees. We concluded
that we must support and implement the proposed salary
threshold, and we remain firmly committed to this position
today.
A higher salary threshold has value to both employees and
employers. As the Department has noted, many nonexempt
classifications can be made with a salary level test alone.
While the classifications under the salary level test can be
made with a quick payroll report, the duties test can be
subject to multiple interpretations. Each exemption has a
lengthy list of factors that must be analyzed. And this task
goes far beyond an examination of job descriptions, work plans,
and organizational charts.
The law requires that we must examine what the employee is
actually doing, and this process must be repeated every single
time we make a program adjustment or a staffing change.
Because the duties test is so difficult to apply in
practice, the salary threshold becomes even more important.
However, the value of the salary threshold is dependent on the
level at which it is set, as demonstrated by an analysis of
PathStone's 490 full-time employees.
At the current salary threshold of just about $23,000,
PathStone has to review the job duties of 176 employees to
determine their exemption status. At the proposed threshold of
$35,000, we have to review the job duties of 133 employees. And
at the 2016 proposed threshold of about $47,000, we have to
review the job duties of only 102 employees.
It quickly becomes clear that as the salary threshold
increases, the number of employees that must be continuously
reviewed under the duties test decreases.
There are numerous strategies that can be deployed once it
is determined that an employee is subject to reclassification,
none of which are specifically mandated by the law. For
employees who routinely work no more than 30 hours per week, we
can reclassify them with little to no financial impact. For
employees who are close to the new salary threshold and who
routinely work more than 40 hours per week, we can increase
their salaries to maintain their exempt status, and we can
mitigate the financial impact by reorganizing job duties and
workloads.
Reallocating job duties is particularly effective when job
duties are moved from an employee who has been reclassified as
nonexempt to an employee who is given an increase to maintain
their exempt status because we can directly tie the salary
increase to additional job duties.
Some critics claim that reclassification reduces scheduling
flexibility and benefit eligibility. However, not all employers
tie benefit packages to exemption status. At PathStone, our
president and CEO has the same benefit package as an entry
level receptionist.
Furthermore, while nonexempt employees certainly do come
with more timekeeping requirements, technology is making this
task significantly easier.
Nonprofits have been held up as a poster child for
employers that will be hurt by an increased salary threshold.
But this argument is invariably advanced by those who are not
familiar with mission-based work. There is no question that a
higher salary threshold will impact our operations,
particularly considering that we are prohibited from
renegotiating our Federal contracts. However, just as our
mission must guide our actions when we serve our constituents,
it must also guide us when we act as an employer.
PathStone's mission of economic self-sufficiency compels us
to support robust regulations and oppose the Department's
attempt to undermine strong overtime protections.
Thank you.
[The statement of Ms. Babcock-Stiner follows:]
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Chairwoman Adams. Thank you very much.
I will now recognize Ms. McCutchen for 5 minutes.
STATEMENT OF TAMMY D. MCCUTCHEN, PRINCIPAL, LITTLER MENDELSON
PC
Ms. McCutchen. Madam Chair, members of the Subcommittee,
thank you for giving me the opportunity to speak today on the
proposed overtime regulations.
I have been living with these regulations for almost 20
years now, revising the regulations in 2004 when I served as
the Wage and Hour Administrator, and preparing comments for the
Chamber in 2015, 2017, and for the current proposal.
For our conversation today, it is important to understand
two things. First, in the FLSA, Congress created exemptions for
executive, administrative, and professional employees based on
job duties, without reference to salary. The text of the
statute refers only to job duties.
Second, going back to 1940, again and again, the Department
has Stated that the purpose of the salary level is only to
screen out obviously nonexempt employees. If the salary level
becomes too high, however, it stops serving as a proxy for the
duties test. It becomes the whole test, which is what the Texas
court found in his reason for invalidating the 2016 rule.
The Department proposes to increase the minimum salary
level for exemption by nearly 50 percent, from less than
$24,000 annually to over $35,000. Much of the commentary around
the Department's proposal has focused on the salary level. But
more important than the final number is the method the
Department used to reach it.
The Department used, more or less, the same methodology as
in 2004, a rule, by the way, that has been in effect for nearly
15 years without a single legal challenge. That methodology was
the best choice for two reasons. First, it is consistent with
historical practice in the Department; and, second, it is the
approach that best finds that salary level that can serve as a
proxy for job duties without replacing the job duties test.
Now, we must remember that the FLSA needs to work
throughout the country, without adverse impact on local
economies and jobs. It must work in every State and every
industry, in large cities and tiny towns, for small businesses
and large, for profits and nonprofits. Like the minimum wage,
States can set a higher threshold salary level, and they have
done so.
In California, for example, exempt employees must be paid
an annual salary of $49,920. The State of Washington is
expected to soon set a similar salary level for exempt
employees in that State. In New York, the salary level is
$58,500.
Now, while that high level may fit the economic conditions
of New York, it does not work in Alabama, where it is less
expensive to buy a house than it is to buy a parking spot in
Manhattan.
In any case, applying the 2004 methodology to set the
salary level was the Department's only viable option, given the
Texas court's decision invalidating the 2016 rule. Referring to
the statutory text, the court reasoned that Congress gave the
Department authority to define the exemptions by reference to
an employee's duties, not by reference to their salaries. The
salary test was, therefore, lawful only when it did serve as a
proxy for duties.
For most of its history, the Department used the salary
test in just that way, but in 2016, the court found the
Department exceeded its authority by setting out to reclassify
millions of employees based on salary alone. The court also
stated that if the Department had simply updated the salary
levels using the 2004 methodology, its action would almost
certainly have been lawful.
Most argue that it is time to increase the salary level.
Those who oppose the proposed $35,000 salary level, that it is
too low, want the Department to stubbornly defend the 2016
rule, offering no compromise between $24,000 and $48,000, even
today. But defending that rule will almost certainly result in
extensive and lengthy additional litigation, as the Trump
administration did appeal the grant of the injunction to the
Fifth Circuit and that appeal is still pending, and also
perhaps a trip to the Supreme Court. Years of additional delay
and--with uncertain results.
It was the overreach in 2016, the refusal to find
compromise even today, which has undermined overtime
protections for the last 3 years, not the current proposal.
Thus, respectfully, I must take issue with the title of this
hearing as I disagree with the conclusion that the Department
is seeking to undermine the FLSA's overtime protections. The
opposite is true. The Department's proposal will ensure that
the salary level is increased now.
Thank you.
[The statement of Ms. McCutchen follows:]
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Chairwoman Adams. Thank you.
Mr. Winebrake, you are recognized for 5 minutes.
STATEMENT OF PETE WINEBRAKE, MANAGING PARTNER, WINEBRAKE &
SANTILLO, LLC
Mr. Winebrake. Thank you, Chairwoman Adams and Ranking
Member Byrne. It is a great pleasure to be here before you all
today.
I am a workers' rights lawyer from Pennsylvania, and I have
had the great privilege of representing thousands of workers
throughout this country in Fair Labor Standards Act cases and
hundreds of workers who have been paid salaries and have not
gotten the benefit of overtime.
I want to--I want to tell you today about my clients, about
my salaried clients. And all of the people I am going to tell
you about today are individuals who make over $35,000 a year.
Generally speaking, they make somewhere between 35 to the low
40's.
These salaried clients who I represent, almost none of them
went to college. Very few went to college. They generally work
between 55 and 70 hours per week. It is very important that you
all realize that in fast food and in the retail industries, it
is not uncommon for workers to work--salaried workers to work
65, 70, sometimes even 75 hours a week.
My clients are working class. Very few of them have any
meaningful amount of savings. Very few of them have retirement
accounts. Many of them lack reliable transportation. And I
would say that the great majority of them are literally living
paycheck to paycheck.
And what do my salaried clients do? What do they do on a
day-to-day basis? I will tell you what they do. I have
represented account managers. They get a fancy job title,
``Account Manager,'' paid a salary of about $36,000, $37,000 a
year for custodial service companies. These workers are
basically doing janitorial work at nursing homes, cleaning the
floors, washing windows, doing janitorial work.
The store managers and assistant store managers who I
represent at small convenience stores and at dollar stores and
at other retail establishments, what are they doing on a day-
to-day basis? They are working the cash register, they are
stocking shelves, they are cleaning the bathrooms, they are
cleaning the floors. If they work in a convenience store that
is associated with a gas station, they are going outside and
they are cleaning near the--near the gas--where the gas is
pumped.
The salaried employees who I represent in the restaurant
and fast food industry, they are given the fancy job title of
``Assistant Manager.'' But what are they really doing on a day-
to-day basis? They are busing tables, they are serving
customers, they are expediting food, they are cooking, they are
washing dishes.
Over and over again--over and over again, it is the same
business model that I see in every one of these cases. And the
business model is very simple. Take a location, whether it be a
store, a restaurant, staff it with one or two salaried
employees and a bunch of hourly employees, set a very strict
payroll budget that is very difficult to meet if you give the
hourly employees overtime.
Remember, if you give the hourly employees overtime, you
have to pay them overtime. Every extra hour that an hourly
employee has to work is an hour that the company has to pay
for. But if you give all that extra work to the salaried
employee, the employer doesn't have to pay anything. It is free
labor. So, the business model is very simple. Staff the
location with a couple salaried employees, and whenever you
need someone to do extra work, give that extra work to the
salaried employee and benefit from that free work.
This fight that I have been watching, and in some ways have
been a part of for the past 2 or 3 years, over these
regulations, what this is all about is preserving that business
model. The reason the chamber is putting up the fight that it
is fighting is they will fight very hard to preserve that
business model.
And I urge the members of this committee to do everything
you can to take that business model away.
Thanks so much, and that is all that I have.
[The statement of Mr. Winebrake follows:]
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Chairwoman Adams. Thank you very much.
And I want to thank all of the witnesses for their
testimony.
Under committee rule 8(a), we will now question witnesses
under the 5-minute rule.
I now recognize myself for 5 minutes.
Dr. Shierholz, as I understand it, if the Department's
approach for setting the salary level is flawed, it will result
in a salary level too low. And a salary level that is too low
makes more employees likely to be improperly classified as
exempt, depriving these workers of overtime pay.
So, can you speak to how the duties test and the salary
level work together to draw a line between those workers who
are eligible for overtime pay and those who are not under the
white-collar exemption?
Ms. Shierholz. Yes. Thank you. So, the salary threshold--
and Tammy talked about this too--can just best be thought of as
a really bright-line proxy for the duties test. It makes it
simple to determine exemption. It makes sure that workers who
work a--who are--like, say, frontline supervisors who work
limited number of--they do a great deal of nonexempt work and
have little bargaining power, that those workers are not taken
advantage of and helps reduce the misclassification of non-EAP
workers as EAP exempt. So that is what the salary threshold
does.
And then the duties test is a more specific mechanism that
helps deter---that determines exemption for people who pass the
salary threshold. Those two tests have always worked together.
Unlike what was claimed by the district court judge, the
2016 rule did not eclipse the duties test. It was still needed
for 6.5--the determination of overtime status for 6.5 million
workers above the duties test. So those--that is the way those
two tests work together.
Chairwoman Adams. Okay. Dr. Shierholz, the Department has
based its current proposal on the methodology used in 2004. The
slide that we have before you, we have--shows that the salary
level set since 1949, inflated to 2020 dollars, so we can
compare what the Department is proposing to historical levels.
I think the chart makes a few things clear. First, the 2014
salary level was not in line with the historical trends, and it
tells me that there was something wrong with the methodology
they used to that salary level. Secondly, the 2016 rule was in
line with the historical trends. And, third, the current
administration is taking an approach that would once again take
us outside of the historical levels.
Why was the 2004 update to the salary level based on a
flawed methodology?
Ms. Shierholz. Like I don't, I am not sure of the
motivation for that, but it absolutely was in error. There was
an absolute pairing of the--of a low salary threshold with a
weak duties test. It shouldn't have happened, and that is what
we have been stuck with until now. There is an opportunity to
really fix that error.
Chairwoman Adams. Why would the Department choose to double
down on a flawed methodology from 2004 with its current
proposal, and how does the Department's approach affect working
people?
Ms. Shierholz. To be honest, I think the Department is
bowing to the interests of the Chamber of Commerce. The core
provisions of their proposal is actually almost exactly what
the chamber asked for. I think this department is really
prioritizing the interest of corporate executives over those of
working people and leaving working people behind.
Chairwoman Adams. Ms. McCutchen States that the Department
had no choice but to use the 2004 methodology for its recent
proposal. Is this true?
Ms. Shierholz. No, this is not true at all. The 2016
threshold was--the 2016 rule was vacated by a single district
court judge in Texas. The Department could have defended it.
Chairwoman Adams. Okay. Thanks very much.
I am going to now recognize the Ranking Member for his
questioning, 5 minutes.
Mr. Byrne. Thank you, Madam Chairwoman.
Ms. McCutchen, if I am right, throughout the entire 8 years
of the Clinton Administration, we didn't get an increase in the
threshold. But midway through the Bush Administration, we did,
under your leadership. And it was only at the very end of the
Obama Administration that we got a new rule, and that rule was
so flawed, it was struck down by a Federal court.
So, I agree with you that the overtime salary threshold
should be updated, and I applaud the Labor Department for
proposing a solution in this area and for being responsible.
My biggest worry is that setting the threshold too high--
and I think you referred to this--will harm small businesses,
nonprofits, and institutions of higher education, as well as
the populations they serve.
In your opinion--in your opinion, does the proposed rule
adequately take these distinct employers into account?
Ms. McCutchen. I share your concern, and I would add to
that local government entities who operate on budgets and
objected to this 2016 rule, as did nonprofits, higher
education.
Except in 2016, the Department also shared your concern and
thus set the salary level at the low end of salaries paid to
employees in lower wage regions, industries, small businesses,
et cetera. In 2016, we saw a huge negative reaction and
concerns from the vast majority of nonprofits who filed
comments, local governments and higher education.
I think most of the comments that have been submitted in
response to this proposal support the $35,000 level, although
that is not universal. And in meetings held by the Small
Business Administration Office of Advocacy, we did hear from
SAS it's a small business that even at $35,000, the new salary
level would be devastating to them.
Mr. Byrne. Well, that doesn't sound like a bunch of big
corporate executives.
Ms. McCutchen. No.
Mr. Byrne. These bad, mean corporate executives. It sounds
like people that run colleges and universities and nonprofits
and small businesses, as you say, municipalities. So, we do
have to take that into account--or the Department of Labor has
to take that into account when they set this rule, too. Don't
they have to take that into account?
Ms. McCutchen. They certainly do. And that is why the Texas
court invalidated it. And I do want to reemphasize that is on
appeal. The Trump administration appealed it. And, you know, if
that moves forward, because this proposal is pushed aside, we
have years of litigation in front of us before we get any
increase at all. And I think that would be devastating too.
Mr. Byrne. I agree with that.
You know, it seems to me that sometimes we would rather
litigate than actually solve a problem. And it sounds like the
Department of Labor is doing is trying to solve a problem.
I have been listening to some of the testimony about a
single district judge. That is our system. We have got single
district judges that have ruled against President Trump all
over the country, and it is in effect. That's the law. We all
learned that in law school, that a single district judge can do
that.
But as you say, that ruling is on appeal. And I hope that
while it is on appeal, that the Department of Labor will take
responsible action to take care of the working people in
America out there.
Let me change subjects for a minute. We know that one of
the most extreme impacts of the radical salary threshold
included in the discredited Obama overtime rule would have been
a mass reclassification of employees from white-collar salaried
employees to hourly workers. By the way, I heard from some of
those people, and they didn't like being reclassified.
What negative effects does this type of reclassification
have on workplace advancement opportunities, worker status and
morale, and workplace flexibility?
Ms. McCutchen. Well, Mr. Byrne, in response to the
Department of Labor's 2017 Request for Information from the
public about the impact of that high salary level, we did a
survey of employers about how they reacted to it, particularly
employers who implemented the change before the injunction was
entered. And what they told us is that they have reduced hours,
they have reduced jobs, they automated, and they raised
consumer prices. And how that is good for employees, I just
can't understand.
Mr. Byrne. I agree with you about that.
Sometimes in some of this high-flown rhetoric, we forget
about the real people that are out there. And I am telling you,
I heard from a lot of people who said they did not like being
reclassified. They took it very negatively themselves.
And I just want to applaud you, when you had the
responsibility, for being responsible, for proposing a
responsible rule based on responsible methodology. And I just
wish that the previous Democratic administration and the
subsequent Democratic administration would have done the same
thing. Because if they had, the workers of America would have
been a lot better off.
With that, I yield back.
Chairwoman Adams. Thank you very much.
I will yield now to Mr. Takano from California for 5
minutes.
Mr. Takano. Thank you, Chairwoman Adams, for this critical
hearing on overtime standards established under the Fair Labor
Standards Act.
Yesterday, I introduced--reintroduced the Restoring
Overtime Pay Act, a bill that would strengthen worker
protections by raising the overtime salary threshold under
which most full-time salary workers are automatically eligible
for overtime pay. It sets the salary threshold to the 40th
percentile of earning of workers in the lowest wage census
region.
In 2020, the salary level would be about $51,000 per year
under my bill. In 2016, the Obama Administration finalized a
rule that would have strengthened overtime for workers by
setting the salary threshold to $47,476, with automatic updates
every 3 years to remain in line with the economy.
Madam Chair, I have a signed letter by dozens of nonprofit
organizations that have commented in support of the 2016 final
rule. I have asked that this letter be entered into the record.
Chairwoman Adams. Without objection.
[The information referred to follows:]
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Mr. Takano. Yes, without objection.
In March, the Trump administration proposed a new rule to
set the salary threshold at $35,308 a year in 2020, without
automatic indexing. This administration proposal is troubling
as it does not go far enough to strengthen overtime protections
for workers and would leave behind about 8.2 million workers,
far from being a radical proposal.
The Obama Administration, you know, proposed what was
adequate. The Trump administration falls far short of serving
ordinary Americans.
Madame Chair, I have a report from the Economic Policy
Institute that outlines how fewer workers will benefit from the
Trump proposal compared to the Obama rule, and I ask that this
report be entered into the record.
Chairwoman Adams. Without objection.
[The information referred to follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Takano. My first question is for Dr. Shierholz. As was
mentioned, a Texas district court concluded that the 2016
salary threshold was too high because the number of newly
overtime eligible workers was high. Can you respond--can you
respond to this flawed reasoning, Dr. Shierholz?
Ms. Shierholz. Yes, that is a really good point. So the
number of workers affected by any increase in the salary
threshold is an absurd measure to use to determine whether that
threshold is appropriate or not, because the number of workers
affected by any threshold is that--that measure is affected by
things that have nothing to do with the appropriateness of the
threshold, like how long it has been since the last update and
whether the prior update was appropriate.
The reason the 2016 rule had affected a lot of workers was
because the rule had not been appropriately updated for over 40
years. That is the reason why.
Mr. Takano. Atrophy--the law that was meant to protect
workers, abuses--I mean, the reason why they put this threshold
in and protect salaried workers is because employers found
clever ways to get around the overtime rule for hourly workers.
And I find it a very specious argument that because we had
neglected at the Federal Government to set a new threshold
level, suddenly a rule which would have caught them up--
ordinary workers up, the judge then said, oh, there is too many
people that would be eligible. It really angers me that such
specious arguments are being used in this committee room to
leave these workers vulnerable.
Because the Trump administration's refusal to defend the
salary level in the 2016 final rule, American workers are
losing wages every day. In 2020, workers stand to lose about
$1.2 billion in wages.
Dr. Shierholz, my bill is based on provisions from the 2016
Obama-era rule. How would the Restoring the Overtime Pay
strengthen the overtime protections for workers?
Ms. Shierholz. It would get--so workers who would get new
protection--it would be 4.6 million workers who would get new
protections under the Restoring Overtime Pay Act, or would get
a bump up to the new salary, and there would be 8.9 million
workers who earn between the old salary and the salary in this
act who would get strengthened protection.
Mr. Takano. Only one more question. Dr.--Mr. Winebrake, it
really angered me, the model you illustrated. Does the
Department of Labor have the authority to include automatic
increase provisions in its rulemaking?
Mr. Winebrake. Sure. Remember, in section 13(b) of the--
Mr. Takano. Turn your microphone on, please.
Mr. Winebrake. Sorry about that.
In section 13(b) of the Fair Labor Standards Act, Congress
explicitly gave the Department of Labor the authority to,
quote, define and delimit the white collar exemption. And under
that authority, that is an extremely broad grant of authority.
The Department of Labor can implement a salary threshold, could
determine what that threshold should be, and can index. There
is nothing--no reason why it can't.
Mr. Takano. Thank you.
Madame Chair, my time has run out. But before I yield back,
let me just say that this court ruling--I don't know that it
would have taken years and years for this litigation to go
through. Such a laughable ruling. Any appeals court would have
to look at what the law explicitly says in statute, where they
have the authority--this was no overreach here. And this is--
the current overtime threshold of overtime pay is out of date
and does not support working families.
Chairwoman Adams. The gentleman is out of time.
Mr. Takano. I yield back.
Chairwoman Adams. Thank you.
I will recognize Dr. Foxx for 5 minutes.
Dr. Foxx.
Ms. Foxx. Thank you, Dr. Adams.
Ms. McCutchen, as you indicated, salaries vary from region
to region and industry to industry, and the cost of living
varies across the country. Despite this reality, your testimony
indicates that the discredited Obama DOL's overtime rule
implemented a salary threshold at the 40th percentile of all
full-time salaried workers nationwide, while in the past, DOL
used the 10th and 20th percentile of salaries in the lowest
wage regions and the industry sector with the lowest wages to
determine the proposed threshold.
Which approach is more appropriate, given the alarmingly
negative impact the Obama rule would have had on small
businesses? Is the current proposed salary threshold fair to
small businesses and employees alike?
Ms. McCutchen. Well, I was at DOL, we set the threshold--I
was at DOL in 2004 when we chose the 20th percentile. So, it
probably will not surprise you that I think that is the most
appropriate level. Now, we doubled the 10th percentile that was
used in 1958 because of the changes that we made in the duties
test in 2004, just accounting for all that mismatch argument
that we keep hearing about.
In 2016--and nobody explained why that--that 20th
percentile was not appropriate or was insufficient to avoid
that mismatch or why doubling to the 40th percentile in 2016
was necessary or--necessary at all, since we had already
adjusted.
Now, since 1940, DOL stated that the only purpose of the
salary level is to screen out those obviously nonexempt
employees. No one has presented any evidence at all that
employees paid below the 40th percentile are obviously
nonexempt, all of them, so that it is a reasonable proxy.
So, it may be true in San Francisco, but it is certainly
not true in rural communities in your own district that
everybody below the 40th percentile is obviously nonexempt. I
think the 20th percentile is the appropriate line to protect
employees adequately in all States, in all regions, in all
industries.
Ms. Foxx. Thank you.
Ms. McCutchen, the invalidated Obama Labor Department's
overtime rule included a provision that indexed the salary
threshold for exempt workers, which would likely have increased
the threshold every 3 years without fulfilling all the
procedural requirements designed to produce sound rules.
How would this discredited approach have impacted business
owners and, in particular, small businesses? And does the
current DOL overtime proposal balance the need for timely
updates to the salary threshold with the need for public input
regarding potential impacts on stakeholders, including small
businesses?
Ms. McCutchen. With automatic increasing, which, by the
way, doesn't occur anywhere else in the FLSA, would have really
adversely impacted small business and local governments and
universities because you would have changes that occurred
automatically, regardless of the economic conditions, right?
And so, the small businesses would be given increases, even if
economic conditions didn't justify it, as our numbers, as you
know, always are not fully up-to-date. They follow our major
economic indicators. And so, it would be very--very
precedential for that.
I think DOL has struck a good balance, committing to review
the salary levels every 4 years but not make increases until it
goes through the notice and comment rulemaking required by the
Administrative Procedures Act. And that is what the FLSA text
requires.
So, we set in 2004 rulemaking that Congress did not grant
DOL the authority to make those automatic increases, and that
has not changed. Congress has not passed an automatic
inflationary increases to the minimum wage, as we have seen
States do. So, if the minimum wage is not indexed based on
inflation, how can anybody argue that it is appropriate to
index by inflation an exemption from the minimum wage? I just
don't think how that argument can possibly be true.
Ms. Foxx. Well, thank you for that. You basically answered
my third question. But I will make one quick comment.
What you indicate is we could be in the midst of a
recession and that automatic increase be written into the
statute and have to go into effect, even if we were in the
midst of a recession, right?
Let me say, you have mentioned this--I don't know if you
want to say anything else about your feeling that the
Department does not have the authority by statute.
Is there anything else you would like to add to that?
Ms. McCutchen. I would like to add to that, speaking on my
own behalf, because this is not the view of the Chamber, and I
am probably an outlier.
I do not believe the Department of Labor has the authority
to set any minimum salary level for three reasons. First, the
text of the statute does not include compensation at all. It is
just duties. Second, other exemptions in the FLSA do include
compensation requirements, like the section 7(i) exemption for
commissioned employees, like the hourly rate for exempt
computer employees. So, when Congress wanted to put in a
compensation requirement, they knew how to do that.
And, third, remember, these white-collar exemptions are
exemptions from both the minimum wage and overtime. And I
personally just don't see how Congress could have authorized
the Department of Labor to set a minimum wage--for an exemption
for minimum wage which is higher than minimum wage.
Ms. Foxx. Thank you, Madam Chairwoman. Thank you for your
indulgence.
Chairwoman Adams. Thank you very much.
I will recognize now the gentlelady from Pennsylvania, Ms.
Wild.
Ms. Wild. Thank you, Madam Chairwoman.
Before I start, I would ask recognition and unanimous
consent to introduce into the record a letter from the
Pennsylvania Department of Labor and Industry. It is a letter
supportive of an increase in the overtime exemption salary
threshold for executive, administrative, professional,
computer, and outside sales.
Chairwoman Adams. Without objection.
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Ms. Wild. Thank you.
Ms. McCutchen, you have made it perfectly clear that you
are opposed to automatic indexing. You are aware, are you not,
that the Secretary of Labor, Mr. Acosta, publicly stated that
the Department of Labor should consider automatic indexing to
make updates more efficient than the time and resources
intensive rulemaking process?
Ms. McCutchen. Yes, I am aware of that.
Ms. Wild. So, you disagree with him about that?
Ms. McCutchen. Yes.
Ms. Wild. Would you agree that automatic indexing would be
more efficient on a time and resource basis than engaging in
formal rulemaking?
And I am just asking you whether you believe it to be more
efficient on a time and resource basis, not whether you agree
with it.
Ms. McCutchen. I do not know. I mean, it is certainly
against the law.
Ms. Wild. It is certainly--I am sorry?
Ms. McCutchen. It is against the Administrative Procedures
Act, right. So, the Administrative Procedures Act was enacted
to make regulations hard. So, the fact that it is hard to
regulate is not a sufficient reason to ignore the requirements
of the Administrative Procedures Act.
Ms. Wild. Well, you are not disagreeing that including
automatic indexing would be a legal aspect, would you?
Ms. McCutchen. If Congress changes the statute to allow
automatic--
Ms. Wild. That could be done.
Ms. McCutchen [continuing]. indexing, then it would be
fine.
Ms. Wild. And that would be in accordance with the
Secretary of Labor's recommendations, right?
Ms. McCutchen. I don't know if that is his most recent
view. He did say that about 2 years ago in a Chamber of
Commerce speech, which, of course, tells you he doesn't do
everything the Chamber of Commerce wants, by the way.
Ms. Wild. And in February of 2019, you were quoted in a
Bloomberg article as saying that if the Department of Labor
tries--and that was just in February of this year--tries to
automatically index that, quote, we will bring suit in Texas
again, end quote. Is that a correct statement of your quote?
Ms. McCutchen. That is--as far as I remember, yes.
Ms. Wild. Am I not correct that automatic updates would
grant employers a degree of certainty and predictability, at
least more so than whether proposed rules might be finalized?
Ms. McCutchen. It is tough--predictability is tough because
the method that the Department of Labor used in 2006 to set
that salary level is not easily repeatable. In fact, Ron Bird,
the economist for the Chamber and a former DOL Chief Economist,
himself had trouble duplicating and replicating the analysis
that got the Department of Labor to its current proposal. It
took him months to do so. So, I doubt it would provide any
predictability for a small business who is not a Ph.D.
economist.
Ms. Wild. Certainly, more predictable than a formal
rulemaking process, is it not? You don't need to answer that.
Let me switch over to Dr. Shierholz, I believe. You have
heard this line of questioning. Can you tell us why your
written testimony indicates that automatic indexing is crucial?
Ms. Shierholz. Yes, and I will just make one correction.
The 2016 rule, that was based on a series that was published on
a quarterly basis by the Bureau of Labor Statistics. They
could--anyone could look at that at any time and know exactly
what to expect going forward.
And the automatic indexing is absolutely crucial, because
when something isn't indexed, that means that the threshold
immediately erodes over time as a standard and it provides
fewer and fewer and fewer protections--
Ms. Wild. Exactly as we have seen happen, correct?
Ms. Shierholz. Yep, that is exactly right.
Ms. Wild. Let me switch to Mr. Winebrake. It's good to see
you. Your testimony talks about employers who misclassify
employees as management to fit that EAP exemption. And I know
you have litigated a lot of these cases. You give a number of
examples of fast-food people being classified as assistant
managers, when in reality all they are doing is working cash
registers and making burgers.
Could you tell us, please, what, if any, impact would
enactment of the Obama-era salary level have on the number of
lawsuits that allege employer misclassification?
Mr. Winebrake. It would have a huge impact. I have
estimated, when I have looked at my law firm's inventory of
white-collar misclassification cases, that if the salary
threshold was $47,000 a year, we probably would have filed 70
percent less lawsuits over the course of the last 5 years.
Ms. Wild. Thank you very much. I yield back.
Chairwoman Adams. Thank you.
We will yield now to the gentleman from North Carolina, Mr.
Walker, 5 minutes.
Mr. Walker. Thank you, Madame Chair. And thank you to our
panel for being here today.
Our friends and colleagues claim that the Department of
Labor proposed overtime rule hurts workers the most, when in
reality the Obama Administration's Department of Labor overtime
rule would have resulted in millions of employees who perform
exempt duties being reclassified from salaried to hourly
workers.
Ms. McCutchen, I believe this negatively impacts their
opportunities for career advancement, which poses detrimental
effects on our local businesses and workers. Can you expand on
some of the negative impacts on the 2016 Obama overtime rule
that would have on small business workers? We are not talking
abstract here, we are talking about the reality of it. Would
you address that, please?
Ms. McCutchen. Certainly. And thank you for asking me that
question. Employees who have been exempt view being
reclassified as nonexempt as a demotion. And you are nonexempt,
you have to track your time. These employees hate having to
punch a time clock. When you are an exempt employee, you can
leave work early on Friday. You can take time off to go to your
children's sporting event, and you do not get docked any pay.
Employees who are reclassified, in particular--in addition
to the opportunities, they do not like having their time
closely watched and monitored and losing pay when they decide
to take a half day off.
Mr. Walker. Sure. A lot of that is just a relationship on a
good employee that earns some of those privileges because the
amount of work and some of the things they are getting
accomplished, and it really does put them in a negative
situation. The rules around overtime pay are also complex.
Many American small businesses such as franchises do not
have the extensive legal teams and accounting departments to
help navigate through these laws. Very complicated. Yet, many
franchisors and other prime companies are ready to provide
guidance to their franchisees and business partners to help
them implement the Department's new rule requirements. But
concerns over triggering joint employer liability, as you know,
causes hesitation to provide such guidance. With over 24,000
franchisees just in my home state of North Carolina, this kind
of guidance would have a significant impact.
So, would it be beneficial, Ms. McCutchen, for the
Department of Labor's proposed rule to include a safe harbor
provision similar to the language included in the Department's
associated health plan rule to ensure employers are protected
from unnecessary joint employer liability when promoting
overtime pay in the workplace? Long question, but would you
speak to that?
Ms. McCutchen. I think it would be incredibly beneficial.
And I don't see any downside or any barrier to the Department
of Labor for doing so. As you know, most franchisees are small
businesses, they do not have lawyers, they do not have H.R.
staff. So, they need to get the guidance. They need to learn
and educate themselves about the FLSA in some way in order to
comply.
And the Department of Labor and the Small Business
administration, they just don't have enough resources to do
that. Now, the Department of Labor has done great this year in
enforcement. They collected a record number of back wages this
year, $305 million, $33 million more than in 2017, with fewer
investigators. But enforcement is not enough. You will never
have enough investigators to go into every business,
particularly small businesses. So, the only way to improve
compliance and to help these franchisees to comply is an idea
like yours.
Mr. Walker. Just the facts, Ms. McCutchen. The DOL's
methodology in calculating the updated salary threshold is
based off the 2004 method used when you were serving as
Administrator of the Wage and Hours Division. Can you please
explain how the 2004 methodology avoided the damaging
consequences of the 2016 rule and would still do so today?
Ms. McCutchen. Well, it is the difference in the
percentile, right. The 20th percentile and the 40th, which
basically doubles the salary level threshold, and that is what
happened in 2016, but it is also the data that they use. We
looked at lower wage industries and lower wage regions. The
methodology in 2006, and frankly, the methodology proposed in
this proposal, includes, for example, salary data from
Virginia, Maryland, and the District of Columbia, which are
three of the 10 highest wage areas in the country. So, you got
to look at the data, too.
Mr. Walker. Sure. Well, we thank you for being a witness.
We thank you for your expertise in this area.
With that, I yield back, Madame Chair.
Chairwoman Adams. Thank you.
I will yield now to the gentlelady from Michigan, Ms.
Stevens.
Ms. Stevens. Thank you, Madame Chair.
I would like to submit, by unanimous consent, two letters
for the record, one from the Governor of my State of Michigan,
Governor Gretchen Witmer, and the other from the AARP. These
comments were submitted to the Wage and Hour Division at the
Department of Labor regarding the Department's proposal to
narrow the scope of workers eligible for overtime protections.
Chairwoman Adams. Without objection.
[The information referred to follows:]
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Ms. Stevens. Thank you all for joining for today's hearing.
And thank you to our remarkable chair for holding this hearing
on the restoring the value of work, evaluating the Department
of Labor's efforts to undermine strong overtime protections.
This is an important part of our committee's work as we
evaluate what the American worker is experiencing as we have
proposed and sought to put through our committee legislation
that will raise the minimum wage, and as we engage in this
conversation around what it actually means to put in a full
day's work and seek to get ahead. And it is a point of irony as
we, you know, often have grand conversations within this body
around regulatory burdens, and yet we are looking to unleash or
remove some of those burdens for our workers and help them get
ahead as we tackle this topic.
But my questions are going to start with Dr. Shierholz.
Strong work force protections and overtime protections, in
particular, are critical to older Americans in the work force.
With older adults continuing to get pushed out of the
workplace, 56 percent to be exact, before they decide to
retire, it is more important than ever that our laws protect
and incentivize living wages for older adults, especially in
the midst of a retirement savings crisis.
So, Dr. Shierholz, what are some segments of the work force
that are most impacted by weak overtime protections?
Ms. Shierholz. Uh-huh. So, one of the things I can do is
look at the workers who would be left behind by the current
proposal relative to the workers that would have gotten
protections under the 2016 rule. And I have some things in
front of me, but 1.7 million workers over the age of 55 would
be left behind by the current proposal relative to the 2016
rule. So, you are right, we would see a lot of workers--older
workers affected, along with women, along with people of color,
along with parents. It really hits the broad middle class.
Ms. Stevens. And additionally, weak overtime protections
for all Americans greatly impacts how much time and resources
family caregivers are able to allocate to their loved ones,
especially as workers with lower salaries are, in many cases,
required to work many extra hours without any pay at all.
And I was wondering, Mr. Winebrake, in your experience
representing workers, how does a low salary level test and thus
weak overtime protections impact employees' work life balances?
Mr. Winebrake. Sure. Well, as I said in my testimony,
there's this business incentive to shift all of the work onto
the salaried employee because the company doesn't have to pay
anything extra for that extra work. It's--I have represented
many clients who have worked, on a regular basis, 60, 65, 70
hours a week. I have also--many of my clients have been
referred to me by workers' compensation lawyers. And the reason
for that is because when you are working 65, 70 hours a week
hauling inventory at a dollar store, or on your feet all day in
a kitchen, you get hurt. You know, you get hurt at work.
And so even though these individuals are called executives
for purposes of the law, they are not executives, they are blue
collar workers, and they are getting hurt. This is also taking
time away from their families, and they very much resent that,
that they are working extra hours for free and not being able
to be home with their kids or their spouse.
Ms. Stevens. Thank you.
And with the remaining time I have, Ms. Babcock, I wanted
to recognize you for your leadership being an H.R.
representative and testifying here today, particularly given
the work that you do--the paperwork that you have to do, the
regulations that you need to comply with. And, you know, if
there is any other points here particularly along the lines of
the--on that paperwork front that you could shed light on from
your experience, we would love to hear from you.
Ms. Babcock-Stiner. Absolutely. Thank you. One of the
things that comes with the automatic updates, employers do like
regulatory predictability and stability. And so, when we have
these drastic and sporadic changes in the threshold that, you
know, range in these dollar amounts, in these increments of
time, it is very hard for us to implement and kind of play
catch-up. So, we actually do prefer regulatory predictability.
And as far as paperwork that is--certainly, what we seem to
be making a living of in the H.R. world, but we really do want
to reduce it, and one of the things about that salary--
Chairwoman Adams. The gentlelady is out of time.
Ms. Stevens. All right. Thank you. I yield back.
Chairwoman Adams. All right. Thank you.
I will recognize the gentleman from Virginia, Mr. Cline.
Mr. Cline. Thank you, Madame Chair. Thank you for holding
this hearing.
It is amazing to me that we are holding a hearing that
considers going backward when the economy is doing so well. We
should be focused on reducing regulations so that businesses
have more flexibility to provide the best options to their
employees.
The Department of Labor has rolled back more regulations
than any other Federal agency in the last 2 years, and I
commend them for that. And there are tangible results that all
of our constituents are benefiting from no matter where you
are. The economy is booming. We have the lowest unemployment
rate in 49 years, 3.6 percent jobless rate, including part time
is the lowest in 19 years.
GDP, the last two quarters, 2.2 and 3.1 percent in the
first quarter. 238,000 new jobs created at the start of the
year. 151,000 in the past 3 months. But only 75,000 new jobs
created in May. There is a danger, there is a real danger of
this economy slowing. And to even consider additional
regulations that would take this economy in the wrong
direction, quite frankly, it is very distressing that we are
even talking about them.
So, I will ask Ms. McCutchen. Many workers place a high
value on workplace flexibility, which allows them to maintain
certain aspects of their personal life that are important to
them. This economy is definitely focused on workers having
choices because unemployment is so low. So how would this Obama
Department of Labor overtime rule, which we are lucky that it
did not go into effect because, quite frankly, it would have
started us behind the eight ball before this economic recovery
even began, and the current boom would have been slowed by so
much more.
How would this rule have undermined the flexibility that so
many workers value? And can you elaborate on the differences
between salaried workers and hourly workers when it comes to
workplace flexibility?
Ms. McCutchen. Let me take your last question first. A
salary--an exempt employee has a guaranteed salary. That means
regardless of the hours they work, whether under 40 or over 40
or even an hour, they get their full salary in any week in
which they perform any work. A nonexempt employee is paid for
the hours they actually work, and that really comes into play
with flexibility.
It means that if you are reclassified as nonexempt, your
hours are going to be closely watched, because although we can
force an increase to the minimum salary level, we can't force
employers to provide overtime hours. And so, the hours that
they work are forced to be under 40 because of the cost, and I
think that is even in Ms. Babcock-Stiner's testimony. That is
one of the options.
And a lot of employees prefer to work more. They prefer to
work different times, especially millennials. So, less
opportunity for putting in the extra hours in order to advance
up the chain in a corporation, more control of the hours you
work and when you work because your employer needs to know when
you are working. So there goes all the teleworking
opportunities for, especially millennials, who prefer to work
at home and don't want the nine to five job.
Mr. Cline. And with all the disruption that this rule
caused or was in the process of causing by more than doubling
the salary threshold, can you speak to the impact that it had
on small businesses? You spoke to it earlier. But small
businesses are a major part of my district and just about
everybody's district. But, in particular, in this gig economy
that we have, and you spoke to that, small businesses are being
created and changing and shifting at even faster rates.
Ms. McCutchen. Well, the money--the extra money for the
overtime pay just doesn't come down from the air. My mom used
to tell me, money doesn't grow on trees, right? So, for small
businesses, they have to find that extra money that the
government is requiring them to pay from somewhere. It has to
come from increased consumer prices. It has to come from
reduced number of jobs or hours. And in this day where we are
all concerned about the impact of artificial intelligence, it
can often come from automating jobs completely, when the price
of--the cost of providing that labor and that overtime exceeds
the cost of actually automating.
Mr. Cline. Thank you.
And, Madame Chair, I yield back the balance of my time.
Chairwoman Adams. Thank you.
I will recognize the gentlelady from Minnesota, Ms. Omar.
Ms. Omar. Thank you, Chairwoman. I would like to ask
unanimous consent to submit for the record a letter from the
AFL-CIO, which emphasizes the need for strong overtime
regulations.
Chairwoman Adams. Without objection.
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Ms. Omar. Dr. Shierholz, in your testimony, you describe
overtime protection as an essential part of ensuring a thriving
middle class. I couldn't agree more with that assessment. If an
employer expects their workers to put in time beyond the
standard 40-hour workweek, then that work should be
compensated. If workers are going the extra mile, why shouldn't
employers be expected to do the same? But after seeing the
latest overtime proposal, I am afraid this protection is being
eroded, just like so many others have been in the past few
years. I am concerned that the current administration's only
goal is to make sure that we have an economy that only benefits
the wealth.
With that in mind, Dr. Shierholz, can you tell us how many
workers would be left behind by the Trump administration's
proposal?
Ms. Shierholz. Yep. I calculated this using the exact
methodology that DOL uses and found that the workers who would
have gotten protections under the 2016 rule but will not get
protections under the Trump proposal, if it is implemented,
number at 8.2 million workers.
Ms. Omar. And which workers would be hurt the most?
Ms. Shierholz. It is a real cross section of the middle
class, but I find that we have these numbers, 4.2 million will
be women, 3 million people of color, 2.7 million parents of
children under the age of 18. It really will hit the middle
class very hard.
Ms. Omar. And this isn't just a problem for today's
workers. This proposal will have a long-term impact. By not
providing automatic adjust in the future, the Department of
Labor would likely be short-changing workers for many years to
come.
Dr. Shierholz, could you share more details about how
working people would be hurt when the salary threshold remains
unchanged for a long period of time?
Ms. Shierholz. Yep. Again, using the exact same methodology
for calculating the impact that DOL used, I found that
workers--if the 2019 proposal is implemented, workers will get
$1.2 billion less than they would have under the 2016 rule. And
due to the lack of automated -automated--automatic updating in
the proposal, that would grow to $1.6 billion over the first 10
years of implementation.
Ms. Omar. And these are--this is real money in their
paychecks. This will affect their ability to buy groceries, to
be able to pay their bills, rent, possibly move to a new
district with better schools. But as we have heard today, a lot
of these workers would be denied that extra income under the
current proposal.
Could you please tell us how this proposal will cost
workers in terms of lost earnings compared to the 2016 final
rule?
Ms. Shierholz. Yep. So, it will--workers will get $1.2
billion less. And I think another thing is they will work more
for that less money, because we know that when we implement
overtime protections, the people will work less hours for free.
So, it hits both on you get less money and you work more, so it
really is a hit to middle-class workers.
Ms. Omar. So essentially, we are asking people to work for
less money.
Ms. Shierholz. Uh-huh.
Ms. Omar. And society will eventually supplement these
people because their children will probably need food, so they
will go on SNAP programs. They will probably need housing
assistance, and we will try to supplement that. They will
probably need to go to college, and we will supplement that.
And so, by not making sure that they are being compensated for
the work and that we are not paying unlivable wage, we will
ultimately be costing all of us more money.
Ms. Shierholz. I couldn't agree more.
Ms. Omar. Thank you so much. I yield back.
Chairwoman Adams. The gentlelady from Georgia, Mrs. McBath,
is recognized for 5 minutes.
Mrs. McBath. Thank you, Madame Chair.
I want to thank each and every one of you for your
testimony today. Thank you for bearing with us. And I know that
this question--or this has been discussed moments earlier,
however, I would like to get a different perspective. So, Ms.
Babcock-Stiner, I will probably be asking you most of the
questions.
I would like to know, from your perspective, how does the
failure to regularly update the salary level impact employees?
And are automatic updates beneficial for employers?
Ms. Babcock-Stiner. So, from an employer perspective,
again, we do like regulatory predictability and to know what is
coming and when it is coming. In the past, there have been
large periods of time between the updates to the salary
threshold, and then updates themselves have been widely varied
as well.
So, from an employer perspective, it does make our life a
little bit easier to know what is coming, as far as the
automatic updates.
Mrs. McBath. Okay, thank you. Also, to Ms. Babcock-Stiner,
how can nonprofits, institutes of higher education, and other
employers with budget constraints respond to increases in
salary thresholds?
Ms. Babcock-Stiner. So, first of all, we have heard a lot
about nonprofits today and people saying that, you know, they
will be amongst the biggest victims here. And the reality is we
do operate under a mission, so we think a little bit bigger
than just one single bottom line. And so, the other thing to
keep in mind is the pressures that are put on nonprofits, the
solution here is not to take away worker protections; the
solution is to increase the funding for nonprofits. And so,
short of that, which doesn't seem to be happening, we do have a
lot of options for shifting around job duties.
Shifting around job duties does not necessarily mean that
the people who are exempt are going to be working significantly
more hours. Shifting around job duties, you know, it gives us
an opportunity to maybe give somebody a pay increase to
maintain their exemption status, and they have some additional
job duties now that go with it.
From an H.R. perspective, we don't like increasing salaries
for the sole purpose of, you know, regulation basically, but
when we can tie it to a small increase in job duties, it
becomes a very effective tool, from our perspective.
Mrs. McBath. Thank you. One more question. When a salary
level is too low, what practical effect does it have on the
ability of employers to determine whether their workers are not
eligible for overtime under the EAP exemptions?
Ms. Babcock-Stiner. So, the salary threshold or anybody who
is below that is automatically basically disqualified for the
exempt status. And it is the number of people who are above the
salary threshold that are really relevant from an H.R.
perspective, because those are the people who I now have to
examine each and every one of their job duties to figure out
whether they are exempt or not.
So, when the threshold is so low, it becomes, you know,
basically worthless as a tool to make those nonexempt
determinations. And so now we have constantly shifting job
duties every time job duties change, every time direct reports
change. Even if a manager is not performing well, you actually
have to reexamine their exemption status to see if they still
qualify for it.
So, the lower the threshold, the more numbers there are
people above it, which means I have to do a lot more work on
the duties test.
Mrs. McBath. Thank you so much. I reserve the balance of my
time to my colleague, Ms. Jayapal, from Washington.
Chairwoman Adams. Yes. Ms. Jayapal is recognized.
Ms. Jayapal. Thank you so much for yielding, Congresswoman
McBath. I do have a full statement for my 5 minutes, but I have
one question that I wanted to follow-up on.
Dr. Shierholz, Ms. McCutchen stated that the 2004 DOL
doubled the percentile from 10 to 20 percent to respond to
change in the test. Is this the full story?
Ms. Shierholz. No. In fact, in that rule, they are very
clear that change from the 10 to 20 percentile was actually
accounting for other changes in the data set that was used.
There were technical changes in the data set. So that increase
in the threshold accounted for that. It did not account for the
change in the duties test. In fact, there is many places in
there where they actually talk about how this is a test that is
consistent with the weaker duties test.
Ms. Jayapal. Thank you. I thought that was important to
clarify, Madame Chair.
Chairwoman Adams. Thank you. Ms. Jayapal, you are
recognized for 5 minutes.
Ms. Jayapal. Great. Thank you.
Thank you all to our witnesses for being here today. Your
time is really precious, and actually, that is what this
hearing is about, whether we think people's time is precious.
Whether this administration thinks that the time of middle-
class people who work for a salary is precious enough to be
protected. So, I appreciate you choosing to spend your time
with us.
I want to share two stories with you from constituents in
my district. Heather, who was a kitchen manager, says, I worked
60 to 90 hours every single week. They wanted me there at 10
a.m. every day for receiving and ordering and through our
busiest kitchen hours, which lasted right up until closing at 1
a.m. After 9 months at that job, my body completely rebelled,
and I had a full-on nervous breakdown.
Here is Annie's story who works in retail. I am often asked
to stay later than my scheduled shift time, regardless of my
state of health or my scheduled shift. I am told that I need to
stay until the job is done, even if that means sleeping at the
store.
These are two of the 8.2 million workers who would have had
their precious time protected by the Obama Administration's
carefully tailored overtime protections. Of those workers who
would have gotten protections, 2.7 million are parents of
children under 18. Anyone who is a parent can understand, and I
am one myself, anyone who is a parent can understand how
important and precious your time is and how important it is to
protect and value that time.
Today, we know that the Trump DOL has refused to vigorously
defend carefully reasoned overtime protections in court,
instead, coming up with this weak, new overtime salaried
threshold with no inflation adjustments that would leave many
workers behind. And I am proud to say that, by contrast, my
home state of Washington has just proposed very thoughtful
salary overtime protections.
Under these State protections, by 2026, salaried workers
won't be left out of overtime protections, unless they earn 2-
1/2 times the minimum--the State minimum wage. As my Governor,
Governor Inslee, put it, we know a strong economy goes hand in
hand with a strong and well-supported work force. My State
knows that people's time is precious and that they should be
compensated fairly when they work so hard. And I don't
understand why the Trump Department of Labor doesn't understand
that.
Dr. Shierholz, you were the Chief Economist for the
Department of Labor under President Obama. You contributed to
the worker protections that the Trump DOL failed to defend.
Under those protections, workers would have had to earn a
higher salary of $47,476 before they could be considered to be
even possibly exempt from overtime pay, and that salary level
would be updated automatically every 3 years.
Why is it important to you, as the Chief Economist of the
Department of Labor, to ensure that there would be those
automatic adjustments?
Ms. Shierholz. When you don't have an automatic adjustment,
the standard just immediately starts eroding the second it goes
into effect. And as time passes, you get more and more--it
erodes more and more. And if you look, between 1938 and 2004,
the threshold was updated, on average, every 11 years. That is
the kind of--those are the kind of gaps that are going passed
over and over again where workers are just left behind.
Ms. Jayapal. And the Trump administration's proposal fails
to include automatic updates, but it instead includes this weak
sort of statement of intention to propose updates every 4
years. What would be the impact of that failure, the
administration's failure, to include automatic increases in
that final rule?
Ms. Shierholz. Yes. An unenforceable sort of vague
commitment to notice and comment rulemaking every 4 years is
just a tried and true recipe for huge stretches to go by
without any update.
Ms. Jayapal. So, workers would just continue to be hurt.
And even if the Department of Labor does adhere to its
commitment, would it be enough to protect workers in the
future?
Ms. Shierholz. Even if--In the very unlikely event they
were able to up--
Ms. Jayapal. I always want to give the benefit of the
doubt.
Ms. Shierholz. Okay. So, in that event, I still think that
is too long. The Obama threshold, by doing it every 3 years,
that pushed the boundaries of what is okay to let that erode
over time. I mean, I wished it were a year--we did it every
year. So, going 4 years is just pushing it too far.
Ms. Jayapal. And, Mr. Winebrake, Secretary Acosta publicly
stated that the Department should consider automatic indexing,
but Ms. McCutchen made it clear that management lawyers would
sue the administration if indexing or cost of living
adjustments were included.
Do you think that the Trump Department of Labor bowed to
the threats of labor management side lawyers and lobbyists when
it failed to include that automatic increase mechanism in its
proposal?
Mr. Winebrake. Well, I don't know what the motivation was
behind the administration's conduct, but I will say that at the
Fifth Circuit Court of Appeals in the appeal to the district
court's decision, the Department of Labor totally changed its
litigation position. In the opening appellate brief, it said
that indexing was legal. And then in the reply brief filed by
the Trump administration, it dropped that argument.
It is very troubling as a lawyer, and I think we should all
be troubled, those of who us just care about the government as
an institution, when in the middle of a litigation, a
governmental agency literally switches its litigation position
in the middle of a case. So, I don't know the motivation behind
that switch, but I know that as a lawyer, I am troubled by the
kind of instability that is created when we can't rely on our
government to take a consistent litigation position and carry
it through. That is what is troubling to me.
Ms. Jayapal. Thank you for that.
And, Madam Chair, before I yield back, could I have
unanimous consent to introduce into the record Governor
Inslee's comment letter on the 2019 NPRM, and also a Bloomberg
News article that quotes Ms. McCutchen to the effect of
management lawyers suing the administration?
Chairwoman Adams. Without objection.
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Ms. Jayapal. Thank you.
Chairwoman Adams. I want to recognize the Chair of the
Education and--oh, I am sorry, Mr. DeSaulnier.
Mr. DeSaulnier, you are recognized for 5 minutes. I
apologize to the Chair.
Mr. DeSaulnier. That is quite all right. I would have taken
second place to the Chair.
Well, I want to thank you all for being here.
I also wanted to ask unanimous consent to submit for the
record a letter from State attorney generals opposing the Trump
administration's--
Chairwoman Adams. Without objection.
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Mr. DeSaulnier. Ms. Shierholz, I wanted to ask you sort of
a disposable income, economic growth, regional question. And I
do this in the context of having been in the restaurant
business for 35 years in California, where we go beyond the
Federal laws. But we had a real problem with the underground
economy, and we actually worked jointly, when I was in the
legislature, Republicans and Democrats, because the chamber was
concerned that people who weren't complying and weren't paying
our rules were undermining conscientious, law-abiding
businesses.
And the relationship to the growth and the economy--now, I
know every State and every region is different, but I would
argue, our GDP, particularly in the Bay Area, has grown,
because we do have good protections for workers. And as
somebody in the restaurant business, I couldn't afford to pay
people anything. But it was my job to manage overtime, which
created more jobs because--you also wanted people in an area
where there is high cost of living, but difficult
transportation issues in the service industry to get people
there, be able to get a livable wage, so they can afford to
actually live in that region. And this is the context of these
urban regions are driving the national economy 65 percent--64
percent of the GDP comes from these urban regions. I don't
think that is right. I think we should be dispersing more jobs
around the country. I have some people in the Bay Area who
disagree with me when I say Google should take more of the jobs
somewhere else.
But the dynamics of a regional economy, having people in
the service industry, for instance, have enough disposable
income. Because when we raised the minimum wage in California,
I would argue, as the only member of the legislature who was
also a member of the California Restaurant Association, that as
long as it was proportionate, it was good for me, because there
was more disposable income.
So, could you talk to that a little bit from an economic
standpoint, knowing that you can't pay everybody everything
they want? But we are going in the opposite direction. And I
would say this in the context of it is a great economy if you
are not relying on wages. When you rely on wages, you are
following further behind. When you look at the metrics on
capital investments, if you own a house, if you own
investments, it is a great economy. But this is what is adding
to our inequality.
So maybe you could just give a little summary of my
comments.
Ms. Shierholz. Yep. No, I think that is really important.
So, we know we have had four-plus decades of rising inequality,
stagnant wages for working people. And one key driver of that
is the erosion of labor standards, like the overtime
protections we are talking about today. If we strengthen those
protections, we reduce inequality, and what that does is it
gets money into the hands of people who are likely to spend it,
rather than people who have a low marginal propensity to
consume, is the term that economists have, but people who have
no choice but to spend the money, they get it into their local
economy, that generates more demand for goods and services,
that generates jobs. That's good for everyone.
So, in this way this actually--these kinds of protections
are deeply important, not just to the individuals who are
protected, but to the economy as a whole.
Mr. DeSaulnier. And when you look at the regional
disparities between urban and rural America, this reinforces
the disparities, correct?
Ms. Shierholz. That is exactly right.
Mr. DeSaulnier. Mr. Winebrake, I want to ask you a question
about litigation, unnecessary litigation, and our Ranking
Member has some good points on this. But I read a book by
Francis Fukuyama, and I actually agreed with him, called
``Trust.'' And his whole argument as he looks at the amount of
infrastructure to get people to do the right thing,
particularly in the business community, and he measures the
United States and Japan and Europe over time, and I think we
went from 5 percent in the fifties to 25 percent.
One of his arguments is, I take from it, is that proper
regulation is a better enforcer of ethical behavior than
private rights of action. You sort of said this. Your business
actually went down when the regulation was more focused. Could
you maybe elaborate on that observation?
Mr. Winebrake. Sure. So, a higher--what the salary
threshold does is it creates a bright-line test. Either if--
let's say the salary threshold were $47,000, that is a bright-
line test. Most of the litigation in white-collar
misclassification cases happens with employees underneath the
$47,000 threshold. In fact, when I look at my inventory, it is
people between $35,000 and $47,000. So, if for all those
workers who right now it's iffy whether they are misclassified,
we have to look to their duties. If instead we just had the
bright-line test, all of those employees underneath $47,000
would get reclassified without us having to analyze the duties
test. And, therefore, all of that litigation where lawyers
fight about is the person's job duties executive or not.
All of that goes away, and that is the basis for--all of
the cases that we filed are happening in that gap between the
Trump administration proposal and the Obama Administration
proposal.
Mr. DeSaulnier. I appreciate that. Another incentive for us
to do what the Obama Administration did, less work for lawyers.
And I yield back.
Mr. Winebrake. I don't want to put myself out of business,
but--
Chairwoman Adams. The gentleman is out of time. Thank you.
I want to now recognize the distinguished Chair of
Education and Labor, Mr. Scott, of Virginia.
Mr. Scott. Thank you, Madame Chair.
I just want to get a couple of things on the record. First,
the Ranking Member talked about the system allowed a single
judge to set aside rules and regulations, and that is true as
part of the system. It is also part of the system, as Mr.
Winebrake pointed out, the appeal is part of the process. Not
only did the administration switch sides, they also essentially
suspended the appeal altogether, all the rulemaking. That is
not part of the system, we should have a full decision.
Second, Mr. Winebrake, we heard--I think we heard that if
you are a salaried employee and showed up 1 hour during the
week, that you could get your full salary. Is that right?
Mr. Winebrake. It is more complicated than that. My friend
is correct that if a salaried employee works under 40 hours,
she could still get the full salary. It is not quite as cut and
dry as that.
Mr. Scott. If somebody showed up an hour for the week, they
would get fired. Isn't that right?
Mr. Winebrake. Sure. And the other thing to keep in mind,
Mr. Chairman, is when these salaried employees don't work a
full week, which is very rare, they are running their leave
time, they are having to take sick time or vacation time. It is
not as if it is just free.
Mr. Scott. I just wanted to make the point that if somebody
shows up an hour a week, isn't going to get the full salary.
Ms. Shierholz, the Department of Labor in 2016 did some
evaluations, and we have heard about higher education--
Ms. Shierholz. Uh-huh.
Mr. Scott [continuing]. for example. Most of the people in
higher--many people in higher education are already exempt,
like teachers, coaches, department heads, and things like that.
Did they calculate that about less than 4 percent of workers in
college would be affected by the rule and most of those don't
work overtime anyway, and that the effect on payroll would be
about 2/100th's of 1 percent?
Ms. Shierholz. Yep. I think that is really important.
Community colleges, 4-year colleges, the vast majority of their
staff are teachers, and they are exempt from this entire
discussion. Research universities may have post-docs who are
researchers who don't do any teaching that may be affected.
Asking big research universities to pay their Ph.D. employees
$50,000 a year is, you know, not an overreach.
Mr. Scott. And for nonprofits, less than 1 percent of
nonprofit workers are both directly affected and regularly work
overtime. Is that right?
Ms. Shierholz. Yep. Yes.
Mr. Scott. And that for small businesses, the estimate was
that the effect on payroll would be less than 1 percent.
Ms. Shierholz. That is right.
Mr. Scott. Okay. Now, one of the things about the exemption
is that it is for bona fide executive, administrative, and
professional personnel. At this administration's level, 15
percent of the people would be covered by that. How likely is
it that somebody who is making less than 85 percent, of
salaried employees, is actually a bona fide executive,
administrative, and professional personnel?
Ms. Shierholz. No, that's a really good point. So, one of
the issues is the duties test is so weak that somebody can be
classified as executive, administrative, or professional if
they spend 99 percent of their time actually doing nonexempt
duties. And so, the salary threshold is really important in
that case to make sure that workers who are doing a ton of
nonexempt duties aren't getting taken advantage of if they are
being paid really low salaries.
Mr. Scott. I think we heard somewhere along the lines that
if you are not exempt, that you have to be reclassified and
paid as an hourly worker rather than a salaried worker. Is that
true?
Ms. Shierholz. That is absolutely false. There are millions
of salaried workers in this country who get overtime when they
work more than 40 hours a week. There is nothing in this rule
that says you have to reclassify salaried workers--
Mr. Scott. So, if you are not exempt and you are entitled
to overtime, it would just be prorated based on your salary?
Ms. Shierholz. Yes.
Mr. Scott. Now, Mr. Winebrake, you kept talking about
people working more than 40 hours a week. If they are not
exempt, they get paid time and a half. Is that right?
Mr. Winebrake. That is correct.
Mr. Scott. And if they are exempt, if they work 10 hours
extra during the week, how do they--much more do they get paid?
Mr. Winebrake. They get paid zero.
Mr. Scott. I mean, not time and a half.
Mr. Winebrake. They get paid nothing. A salaried employee
just gets no pay for their extra work.
Mr. Scott. Now, does that extra work that is not paid for
have to be executive, administrative, or professional?
Mr. Winebrake. To Dr. Shierholz's point, it generally is
not. It is generally the reason that--
Mr. Scott. They just work whatever hours they work. They
could be stocking shelves for those extra hours.
Mr. Winebrake. Sure.
Mr. Scott. But you do not have to be--you are taking
advantage of the executive, administrative, or professional
exemption, but the extra hours do not have to be executive,
administrative, or professional?
Mr. Winebrake. They generally are not. Correct.
Mr. Scott. Thank you, Madame Chair.
Chairwoman Adams. Thank you.
And thank you all for your testimony and for your questions
as well.
I want to remind my colleagues that pursuant to committee
practice, materials for submission to the hearing record must
be submitted to the committee clerk within 14 days following
the last day of the hearing, preferably in Microsoft Word
format. The materials submitted must address the subject matter
of the hearing. Only a member of the committee or an invited
witness may submit materials for inclusion in the hearing
record. Documents are limited to 50 pages. Documents longer
than 50 pages will be incorporated into the record via internet
link that you must provide to the clerk within the required
timeframe. Please recognize that years from now that link may
no longer work.
Again, I want to thank the witnesses for their
participation today. What we've heard is very valuable. Members
of the subcommittee may have some additional questions for you,
and we ask the witnesses to please respond to those in writing.
The hearing record will be held open for 14 days in order to
receive those responses.
I remind my colleagues that pursuant to committee practice,
witnesses' questions--witness questions for the hearing record
must be submitted to the majority committee staff or committee
clerk within 7 days. The questions submitted must address the
subject matter of the hearing.
Before recognizing the Ranking Member for his closing
statement, I would ask unanimous consent to enter the following
materials into the record: The National Employment Law Projects
comment letter opposing the Trump Administration's 2019
proposal; a 2016 letter from over 200 college and university
professors in support of the 2016 rule.
Without objection.
[The information referred to follows:]
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Chairwoman Adams. I now recognize the distinguished Ranking
Member for his closing statement.
Mr. Byrne. Thank you, Madam Chairwoman. And I do agree with
you, this has been a very enlightening session.
Let me begin by asking unanimous consent to place into the
record letters from the following organizations expressing
concerns with the Department of Labor's 2016 overtime rule: the
American Hotel and Lodging Association, College and University
Professional Association for Human Resources, and the Society
for Human Resource Management.
Chairwoman Adams. Without objection.
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Mr. Byrne. Thank you.
So, what this is really supposed to be all about are the
people in America who work for a living, and sometimes in
Washington, we forget them. We start thinking about things
other than what this law is really aimed at doing, and that is
protecting and helping men and women that work every day, yes,
for a paycheck, but they do a lot of things for everybody in
this country, and America wouldn't be America without them. And
so, this law was designed to help them.
When we don't do anything about it, when we wait years and
years and years before we change the threshold, we are not
helping them. So, what we have was, prior to the Bush
Administration, a period--a long period of time, nothing. Then
at least the Bush Administration took a responsible action. And
then we had years again when we didn't do anything.
And what the Trump Administration has done is dealt with
this expeditiously. That is what is in the best interest of the
workers of America. And remember what we were talking about
earlier, some of these people that we tried to reclassify did
not want to be reclassified. They were angry at being
reclassified, and no one listened to them. No one paid them any
attention. There were real costs here.
The University of Alabama provided information to my office
that said it would cost the University of Alabama $15 million,
and they put their decisionmaking in really stark contrast for
me. They say, do we raise tuition to cover that or do we cut
back on the services that $15 million represents? Either way,
we hurt the students at the University of Alabama. And that is
just one example of many, many universities and community
colleges that we heard from.
So, I think sometimes we get up here and we debate these
things in the ether, and it is not where things really matter.
They matter out there in the many, many workplaces in America.
My district doesn't have a lot of large companies in it. We
have mainly small-to medium-size companies. And that is where
most of the people are employed. That is where most of our
workers work, not just in my district, but around America.
And we oftentimes forget that is who we should be thinking
about, the workers at those small companies. Yes, workers at
universities. Yes, workers at nonprofits, who are going to be
terribly affected in a very terrible way by the Obama rule.
What the Trump Administration has done has been a
responsible effort to help the workers of America. And I am
deeply grateful that they have done that, and I hope they will
continue to do that. And I hope future administrations will do
so as well.
With that, Madam Chairwoman, I yield back.
Chairwoman Adams. Thank you, Mr. Byrne.
I now recognize myself for the purpose of making my closing
statement.
As we have heard today, over the past 40 years, the Federal
Government's failure to adequately update the white collar
salary level has weakened overtime protections for millions of
workers. These weak protections have made it all too easy for
salaried workers to be denied the overtime protections to which
they are entitled.
In fact, as one of our witnesses testified, some employers
are building a business model based on weak overtime standards
by loading up salaried workers with excessive hours, with no
overtime pay, and leaving other workers with too few hours.
As we have heard, the Obama rule would have provided
millions of workers with new or strengthened overtime
protections. The 2016 rule would have also made it easier from
employers to properly classify which part of their work force
is eligible for overtime protections and decreased employers'
exposure to costly litigation.
Rather than defending the Obama-era overtime update in
court, the Trump Labor Department issued a proposal that falls
well short of what workers deserve. Because the Trump
Administration is using the same flawed approach used in 2004,
we do not have to speculate what will happen to workers. We
know that this proposal will leave too many workers with less
money in their pockets and less time to spend with loved ones.
I urge the Department to abandon its current efforts and
defend the 26--2016 rule in court. Democrats stand ready to
protect workers where the administration fails to do so. The
Restoring Overtime Pay Act, H.R. 3197, would codify the strong
salary threshold set in the 2016 final rule and require
automatic updates every 3 years to ensure the level remains in
line with overall increases in workers' wages. I note the
Department does currently have authority to do so.
Growing income and inequality and the declining power of
workers have only reinforced the need for strong overtime
protections. Restoring workers access to strong overtime
protections, raising the Federal minimum wage, and protecting
workers' rights to join a union are the pillars of Federal
efforts to give hardworking Americans a raise. We must all work
to build an economy that works for all Americans, not just the
wealthy few.
Again, I want to thank all of our witnesses for their
testimony today.
If there is no further business, without objection, the
committee--the subcommittee stands adjourned.
[Additional submission by Mr. Byrne follows:]
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[Questions submitted for the record and their responses
follow:]
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[Dr. Shierholz's response to questions submitted for the
record follow:]
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[Mr. Winebrake response to questions submitted for the
record follow:]
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[Whereupon, at 12:12 p.m., the subcommittee was adjourned.]
[all]