State senators’ recent adoption of House Concurrent Regulatory Review Resolution 1, disapproving the state Department of Labor and Industry’s proposal to significantly expand overtime eligibility standards is crucial for employers, Pennsylvania Chamber of Business and Industry President Gene Barr said.
The concurrent resolution would prohibit the Department of Labor & Industry from publishing Regulation #12-106, which updates the minimum wage and overtime exemptions for administrative, executive and professional employees. The Senate Labor and Industry Committee approved the House resolution on May 26.
“We thank House and Senate lawmakers for adopting this resolution, given the concerns that the Pennsylvania Chamber and a large and diverse coalition have raised for several years and are only exacerbated by the current healthcare and economic emergency,” Barr said. “Many employers unable to absorb additional labor costs will be forced to shift salaried employees into hourly positions so that hours can be tracked and capped in order to avoid overtime costs. Employees may technically be eligible for overtime pay, yet they lose the flexibility and predictability that comes with earning a salary with no guarantee of additional wages.”
Other aspects of the proposed rule have also prompted additional employer concerns. For example, the rule falls short of its stated goal of addressing complicated inconsistencies with federal law and it proposes to automatically grow overtime eligibility in coming years with larger expansions.
“This proposal has been controversial since a version was first proposed by former President Obama and ultimately struck down by a Federal Judge he had nominated a few years earlier,” Barr said. “Reasonable people can disagree on this proposal; and while we don’t question the positive intentions behind it, we hope supporters recognize that it cannot be considered in a vacuum. Many employers most adversely impacted, including nonprofit organizations, higher education, restaurants and others, are also among those who have been hit hardest by the pandemic and economic fallout. Imposing additional costs and removing workplace flexibility will harm employers who are already struggling, adding another obstacle on Pennsylvania’s path to economic recovery.”