Weekly Legislative Update - March 18, 2019

Department of Labor Issues Notice of Proposed Rulemaking to Update Overtime Regulations
 
The U.S. Department of Labor (Department) announced a Notice of Proposed Rulemaking (NPRM) that would make more than a million more American workers eligible for overtime.
 
Under currently enforced law, employees with a salary below $455 per week ($23,660 annually) must be paid overtime if they work more than 40 hours per week.  Workers making at least this salary level may be eligible for overtime based on their job duties.  This salary level was set in 2004. 
 
This new proposal would update the salary threshold using current wage data, projected to January 1, 2020.  The result would boost the standard salary level from $455 to $679 per week (equivalent to $35,308 per year). 
 
The Department is also asking for public comment on the NPRM's language for periodic review to update the salary threshold. An update would continue to require notice-and-comment rulemaking.
 
In developing the proposal, the Department received extensive public input from six in-person listening sessions held around the nation and more than 200,000 comments as part of a 2017 Request for Information (RFI).
 
The NPRM maintains overtime protections for police officers, fire fighters, paramedics, nurses, and laborers including: non-management production-line employees and non-management employees in maintenance, construction and similar occupations such as carpenters, electricians, mechanics, plumbers, iron workers, craftsmen, operating engineers, longshoremen, and construction workers. The proposal does not call for automatic adjustments to the salary threshold.
 
A 2016 final rule to change the overtime thresholds was enjoined by the U.S. District Court for the Eastern District of Texas on November 22, 2016.  As of November 6, 2017, the U.S. Court of Appeals for the Fifth Circuit has held an appeal in abeyance pending further rulemaking regarding a revised salary threshold.  As the 2016 final rule was enjoined, the Department has consistently enforced the 2004 level throughout the last 15 years.
 
More information about the proposed rule is available at www.dol.gov/whd/overtime2019. The Department encourages any interested members of the public to submit comments about the proposed rule electronically at www.regulations.gov, in the rulemaking docket RIN 1235-AA20. Once the rule is published in the Federal Register, the public will be able to submit comments for 60 days in order for those comments to be considered.
 
TIA will ask the membership for their input as we prepare comments. 

Small Business Legislative Council (SBLC) Announces Chair and Top Priorities for 2019
 
The Small Business Legislative Council (SBLC) announced that the Council's top priorities for 2019 will be addressing the labor shortage for small businesses, tax reform, infrastructure and rural development, trade and health care.  These priorities were determined by the SBLC's Board of Directors and membership. TIA is an SBLC board member.
 
In the coming year, the TIA and SBLC will be working towards bi-partisan solutions to ensure an ample flow of qualified and reliable workers for businesses of all sizes.  This will include promoting innovative approaches to workforce development and skills training and efforts to address the immigration issues and opioid crisis that have impacted labor flow. TIA and SBLC will also be continuing its work to promote the interests of small business as the provisions of the 2017 tax reform bill continue to be implemented, amended or repealed. In particular, TIA and SBLC will work to make the estate tax exemption provisions permanent and to significantly increase the threshold levels contained in 199A in order to reduce complexity. Finally, TIA and SBLC will focus on supporting efforts to improve the critical infrastructure upon which all Americans, including small businesses, rely and expanding opportunities to rural communities. 
 
"As a non-partisan association that, through its members and their members, represents all sectors of the economy and a significant swath of the country's small businesses, we believe that the SBLC has a unique role to play this year in helping the divided Congress reach bi-partisan solutions to real world problems," said Mr. Rosenbusch, SBLC president.  Adds SBLC President and General Counsel, Paula Calimafde "uncertainty is extremely difficult for small businesses. Whether it be a lack of clarity over what taxes a business will owe or a concern over whether there will be enough workers to meet demand, small and closely held businesses play a critical role in our economy, and it is critical that our laws and systems are set up to help them thrive and not create unnecessary barriers to their success."
 
The SBLC is an independent, permanent coalition of national trade and professional associations whose goal is to maximize the advocacy and presence of small business on Federal legislative and regulatory policy issues, and to disseminate information on the impact of public policy on small businesses.  

WOTC Skeptic Emerges At Ways And Means Hearing 
 
Ways and Means Subcommittee on Select Revenue Measures hearing last week on "Temporary Policy In the Internal Revenue Code" was uneventful for the most part, with biodiesel and railroad track maintenance extenders garnering supportive comments from committee members.
 
Testimony was limited to a distinguished panel of experts, including Brookings Institution and PricewaterhouseCoopers, who discussed problems of expiration and short-term extensions, the consensus being that worthwhile programs should be made permanent.
 
WOTC was raised by Congressman Tom Suozzi (D-NY) who asked the Pricewaterhousecoopers' representative, Ms. Pam Olson, "Whether a tax credit for employers is needed in low unemployment?"  Ms. Olson obliged that the program should be carefully reviewed.
 
Congressman Suozzi is in his second term and new to Ways and Means.  He represents New York's 3rd District, on Long Island.
 
Congressman Suozzi's question whether WOTC is required in full employment is understandable for those  unfamiliar with WOTC's role in the social safety net, but upon reflection, it has to be said that a single figure-the overall unemployment rate-doesn't go very far in shaping poverty policy or lending a hand to a veteran or person with disability. 
 
If Congressman Suozzi addressed his question to Mark Mazur of the Brookings Institution, Mr. Mazur might have quoted his colleagues pioneering research on place-based poverty:
 
"Every month on 'jobs day' the Bureau of Labor Statistics releases information about national employment growth and overall labor market health.  One important feature not in the headline numbers is where these jobs are emerging. . . . The bottom quintile (and to a lesser extent the second-to-bottom quintile) is trailing the rest of the country by a substantial margin. . . . Mobility is lower than in the past and in particular, people are not always moving from struggling counties to booming ones. . . . Places in the bottom quintile of employment have a prime-age employment rate of 67 percent compared to 83 percent in the highest employment counties." (1)
 
"In our research, we found that compared to the lowest-performing U.S. counties, in the highest performing counties:
  • Workers between the ages of 25 and 54 are 16 percentage points more likely to be employed;
  • Life expectancy is a full six years longer; and
  • The poverty rate is nearly three times lower.
"We found large, persistent gaps between places and little or no convergence over time: counties that struggled in 1980 generally continue to struggle today, and most thriving counties in 1980 still do well today. . . . What accounts for differences among places? . . . Places with low high school and college completion rates tend to struggle. . . . rural communities have lower performing economies . . . underinvestment in predominantly black communities: black Americans and their neighborhoods have experienced unequal treatment within the U.S. safety net, poorly funded public schools, and disproportionately high incarceration rates. . . . Residents of struggling areas face a constellation of challenges that are mutually reinforcing, from limited investment in public goods to weak labor markets." (2)
  1. Brookings Institution, "Has Job Growth Reached America's Struggling Places?," March 7, 2019
  2. Brookings Institution, "Place-Based Policies For Shared Economic Growth," October 19, 2018
For evidence-based policymaking, Congress should pay attention to these findings of forty years of stagnant economy in rural areas and clusters of urban areas.  Many remedies are being advanced, but all share a glaring weakness-they cost a lot.  WOTC working in conjunction with EITC and other parts of the social safety net remains the nation's most cost-effective anti-poverty program for those receiving public assistance, as well as job creator for veterans and people with disabilities.