PA Legislative Director Op-Ed on Wolf's OT Proposal

Date: October 03, 2018

He is not a "Small Business Governor"

The following opinion piece written by NFIB’s Pennsylvania Legislative Director, Rebecca Oyler, was published in in the Patriot News (PennLive.com) on Wednesday October 3.

Wolf’s overtime proposal proves he isn’t the small business governor he claims

In recent weeks, Gov. Tom Wolf has run a campaign ad stating that he is a small-business governor.

As the legislative director of a professional association that represents nearly 14,000 small businesses across in Pennsylvania, I know nothing could be further from the truth.

Since taking office, Wolf has pushed income and sales tax increases, hikes in gross receipts taxes, and costly labor mandates that negatively impact small businesses in the state.

His latest regulatory proposal to more than double the salary threshold for the workers eligible for overtime in Pennsylvania would be unaffordable for many small businesses and nonprofits and have harmful consequences for many employees.

It may sound good for workers, but Wolf’s overtime proposal is not likely to result in increased pay for employees of many small businesses. Instead, companies that cannot afford the significant cost increase will be forced to reduce worker hours and limit opportunities for employees to rise to higher management, administrative, and professional positions.

The proposal will also be a killer for nonprofits and charities.

But, the problems go beyond higher labor costs. This ill-advised proposal reduces flexibility for the employer and employee.

Small businesses are leaders in offering flexible working arrangements, an advantage they use to attract and retain talented employees.

Currently, their salaried employees can often come in late or take time off, work from home, or stay home with a sick child to make up for the busy times. And, they frequently get free training, paid meals, and travel expenses.

These benefits will disappear when small businesses, operating on limited profits, are forced to reclassify these employees as hourly workers. Their time on the job will have to be limited and monitored.

Many employees impacted by the governor’s plan, who have worked hard to move up to managerial status, bigger responsibilities, and new experiences, will likely feel frustrated to return to punching a time clock.

Wolf’s overtime proposal is also a one-size-fits-all approach that doesn’t consider that new manager salaries in cities are much higher than those offered by small employers in rural areas of the state.

Plus, the initial increase in the salary threshold for overtime is extreme, and it increases automatically in the future even if we are experiencing an economic downturn.

Former President Barack Obama proposed a very similar overtime expansion in 2016. Small business and other groups argued the financial impact was devastating, and a federal judge in Texas issued an injunction.

Now, the Trump administration is holding roundtable meetings around the country to get input from stakeholders. Why our governor wants to act on overtime thresholds now, before the federal government issues a national rule, is curious.  

In Pennsylvania, the concerns of many small businesses and non-profits about the impact of Wolf’s OT proposal came flowing in during a recent comment period.

After review, the state’s Independent Regulatory Review Commission said much more must be done by the state to determine the fiscal impact and weigh the consequences. It seems the perfect opportunity for Wolf pull this proposal off the table, and finally act like a small-business governor.

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