Protecting Workers, Students and Small Businesses
Last May, the Department of Labor released their finalized overtime rule, a misguided regulation that is set to wreak havoc on employers throughout the state of Tennessee, particularly small businesses, nonprofits and schools. This rule, set to take effect December 1, would be particularly detrimental to Tennesseans, as the average annual wage is $41,300 in Tennessee. In my district, the median household income is even lower at $39,081. The Department’s proposed threshold for overtime is $47,476. That means well over half of the households in upper East Tennessee could be impacted by this ruling. My question to the Department of Labor is: if over half the workers in an area could be affected by a regulation, where will the money come from?
The answer is fairly obvious to anyone who has run a business or had to meet a payroll. To comply with the regulation, fewer full-time employees will be hired, and workers will be strictly limited in their hours. While the regulation may give a few employees a pay increase, for many other employees it will result in fewer opportunities and underemployment.
This rule will likely force some employers to return their employees to hourly pay instead of salaried positions, and some institutions like the University of Tennessee have predicted they will incur over $9.5 million in additional costs, which will only further drive up the cost of education. We all want to see wages go up and the economy recover like it has in the past, but that happens by decreasing the number of oppressive regulations to stimulate job creation and growth. You won’t achieve an economic recovery by adding yet another layer of regulation that could put small companies and non-profits out of business and cause them to cut workers’ hours.
Last week, I was proud to support H.R. 6094, the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act. This commonsense bill delays the start date of the Department of Labor’s proposed overtime rule by six months. H.R. 6094 provides small businesses, non-profits, and schools the immediate relief and necessary time they may need to prepare.
As a member of the House Education and Workforce Committee, I am keenly aware of the negative impact this regulation will have on students, workers, job creators and non-profits; which is why we must do everything possible to stop this executive overreach. Simply put, the overtime rule would cause more harm than good to hard-working Americans. As if this increase isn’t bad enough, the rule also requires an automatic update to the salary threshold every three years, which will result in reduced career upward mobility for many workers.
I am a proud Eagle Scout. As you may know, the motto of the scouts is “Be Prepared.” Unfortunately, for groups like the Boy Scouts of America that rely on donations, there’s no way they could be prepared to pay overtime to all of their employees making less than $47,476 and continue operating. This proposed rule will do nothing but hurt an already ailing economy and force groups like the Boy Scouts to cut back on their operations that help kids, rich and poor, come together and learn the skills they need to be a productive member of society when they grow up.
I hope that the Senate will recognize the damage the overtime rule is likely to impose on all American workers, students, and public-service individuals, and pass the Regulatory Relief for Small Businesses, Schools, and Nonprofits Act.Feel free to contact my office if I can be of assistance to you or your family.