A lot of small businesses and their employees had a happy Thanksgiving, thanks to Attorney General Adam Laxalt. He led a successful legal challenge to halt the implementation of a Federal Department of Labor rule that was to kick-in on Dec. 1 — a rule that would have imposed millions of dollars of unfunded liabilities on state and local governments and killed jobs.
The rule would have doubled the salary an employee must earn to be exempt from overtime regulations — from $23,660 per year to $47,476 — and increased the requirements for tracking work hours for nonexempt employees.
The Obama administration claimed this rule would help ensure employees get paid the overtime they deserve, and I support that. But the reality was that this rule was such an expansion of the law, and placed such a huge burden on small businesses, many small employers were taking actions that actually hurt their employees.
In talking with business owners who were preparing for this rule, they were moving some salaried employees to hourly, which meant those salaried workers lost much of flexibility they generally enjoy. Instead of being able to leave early to attend a child’s ball game, employees would have to clock in and clock out.
And forget about being able to work from home because you had a sick child; that was essentially banned because there was no way to “track” your hours. The rule took away incentives to be a “salaried” employee and discouraged workers from putting in that extra effort to stand out from their peers.
As Bruce Gescheider, owner of Moana Nursery, explained: “The advantages of a small business is that you can have a family atmosphere — family work balance. All that ends up going away for a small group.”
The rule also placed a big burden on small business owners who had to add time card procedures, retrain employees and managers to handle the procedures and look for ways to make budgets work with the new salary requirements. It also impacted state and local governments, who were facing similar budget concerns.
This rule is one of many this administration has proposed under the ruse of helping employees. A recent study by the National Association of Manufacturers found the Obama administration has finalized nearly twice as many major labor regulations per year than any of the previous four administrations. The study estimated that 155,700 jobs will be lost over the next 10 years because of these rules, and they will require more than 400 million hours in paperwork.
Now I know there are bad employers, and some regulation is needed to ensure businesses don’t treat employees unfairly. But this administration’s attitude that “government knows how to run a business better than you do” is hurting job growth.
So thank you, Attorney General Laxalt, for taking the lead to fight this rule. The holidays will be brighter for many employees and employers.
Randi Thompson is a political and public relations consultant. You can reach her at Randi@RandiThompson.com.