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Federal Court Blocks Obama Overtime Rule!
A federal court on Tuesday blocked the start of a rule that would have made an estimated 4 million more American workers eligible for overtime pay heading into the holiday season, dealing a major blow to the Obama Administration's effort to beef up labor laws it said weren't keeping pace with the times. The U.S. District Court in the Eastern District of Texas granted the nationwide preliminary injunction, saying the Department of Labor's rule exceeds the authority the agency was delegated by Congress.
Overtime changes set to take effect Dec. 1 are now unlikely to be in play before vast power shifts to a Donald Trump administration, which has spoken out against Obama-backed government regulation and generally aligns with the business groups that stridently opposed the overtime rule. "Businesses and state and local governments across the country can breathe a sigh of relief now that this rule has been halted," said Nevada Attorney General Adam Laxalt, who led the coalition of 21 states and governors fighting the rule and has been a frequent critic of what he characterized as Obama Administration overreach. "Today's preliminary injunction reinforces the importance of the rule of law and constitutional government." The regulation sought to shrink the so-called "white collar exemption" that allows employers to skip overtime pay for salaried administrative or professional workers who make more than about $23,660 per year.
Critics say it's wrong that some retail and restaurant chains pay low-level managers as little as $25,000 a year and no overtime — even if they work 60 hours a week. Under the rule, those workers would have been eligible for overtime pay as long as they made less than about $47,500 a year, and the threshold would readjust every three years to reflect changes in average wages. The Department of Labor said the changes would restore teeth to the Fair Labor Standards Act, which it called "the crown jewel of worker protections in the United States." Inflation weakened the act: overtime protections applied to 62 percent of U.S. full-time salaried workers in 1975 but just 7 percent today. The agency said it's now considering all its legal options. "We strongly disagree with the decision by the court, which has the effect of delaying a fair day's pay for a long day's work for millions of hardworking Americans," the labor department said in a statement. "The department's overtime rule is the result of a comprehensive, inclusive rulemaking process, and we remain confident in the legality of all aspects of the rule."
Opponents fought hard against the rule, saying it would increase compliance costs for employers who would have to track hours more meticulously and would force companies to cut employees' base pay to compensate for overtime costs that kick in more frequently. "This overtime rule is totally disconnected from reality," said Karen Kerrigan, president and CEO of the Small Business and Entrepreneurship Council. "The one-size-fits-all doubling of the salary threshold demonstrated ignorance regarding the vast differences in the cost-of-living across America."
The court agreed with plaintiffs that the rule could cause irreparable harm if it wasn't stopped before it was scheduled to take effect next week. The Department of Labor could appeal the Tuesday ruling, which might end up at a Supreme Court that includes some Trump appointees. The impending rule wasn't front and center in the presidential campaign, but Trump did tell the news site Circa in August that he would love to see a delay or carve-out for small businesses in the overtime regulation. Republican House Speaker Paul Ryan was more vocal against it, saying it would be an "absolute disaster" for the economy and was being rushed through by Obama to boost his political legacy.
OCA Testifies To Joint Committee About The Need For A Gas Tax Increase And Other Funding Options
Last week, OCA testified to the Joint Legislative Task Force on Department of Transportation Issues, regarding the need for additional funding. The focus of the hearing was the efficacy of the state’s gas tax for meeting transportation funding needs. Angela Van Fossen, OCA’s Director of Legislative and Environmental Affairs, addressed the committee about both state and local funding needs. Our testimony noted that Ohio’s gas tax has not been increased since 2005, which the last year of an increase of 6 cents, spread out over a three year period. The federal government also hasn’t increased its user fee on motor fuel since 1993. System needs will continue to compound, while funding will soon be reduced, due to the decrease in the availability of revenue from Turnpike bonding; inflation; and the age of the system.
The committee may be meeting one more time this year, before it submits a report in December. Please click here to see the testimony.
Your Help Is Needed On Unemployment Compensation Bill - Send A Message Using Your Legislative Action Center
If you haven’t already sent a letter to your state legislators and the Governor about potential changes to the state’s unemployment compensation system, now is the time! The post-election lame duck session is underway, and a major focus of this year’s lame duck session is the Unemployment Compensation bill, which aims to modify the state’s insurance program for out-of-work employees. The program has been insolvent for years, and Ohio’s employers, who fund the program, have until recently been paying a penalty to help Ohio pay back the federal government for loans Ohio had to take during the great recession so it could make payments to employees. The state has now paid off the loans and the penalty will be eliminated.
House Bill 394 was introduced earlier this session with the stated goal to make the fund solvent before another recession hits. But it didn’t. The bill was pushed by the Ohio Chamber of Commerce and other large employer associations, who don’t care that our industry is affected by Ohio’s weather patterns, meaning our employees are typically laid off over the winter months. It was an extremely one-sided attempt and would have severely reduced employee benefits from 26 weeks to 12-20 based on the unemployment rate, added additional waiting weeks and generally made it harder for employees to qualify for benefits. In the first year alone, benefits to unemployed workers would have been cut by $460 million and would have been cut by a whopping $4.3 billion over the next ten years. Meanwhile, employers were affected in a very positive way, reducing their payments into the system by $2.5 billion. Even after all of that, the system still wouldn’t have reached the required solvency target, remaining more than $1 billion short.
26 weeks of unemployment benefits are the national norm – in fact, 42 other states provide 26 weeks of unemployment compensation. It is also shocking to note that 76% of Ohio’s employees are not even eligible for unemployment benefits. Reducing the benefit weeks below the national average and making it even more difficult for people to qualify for benefits will just exacerbate our workforce shortages. Why would anyone ever join our workforce in the first place or why would they stick with our workforce, knowing that every winter they’ll take a large financial hit?
For these reasons, OCA has been a leader in a construction employers’ coalition that strongly opposed House Bill 394. With opposition from construction associations, labor, the trades, anti-poverty groups and others, the bill hit a brick wall. A joint legislative committee was appointed to take testimony from interested parties on the issue over the last several months, with the stated goal of coming up with a bill or amendment to pass in the lame duck session. OCA and AGC of Ohio testified regarding our concerns with House Bill 394 and continue to be heavily engaged on the issue, along with the Operating Engineers and other construction labor groups.
We don’t know, beyond rumors, what will be in the bill and believe it is a very fluid situation at this point as negotiations are taking place between the House, Senate and with interested parties. We’ve been told to expect a new version on November 29th, with the legislature attempting to pass the bill over the few remaining session days between now and December 8th. We are asking the legislature to slow the process by having all parties – including business, labor, and the construction industry sit down and negotiate a compromise, starting in January and being completed by July 1st. Please go towww.ohiocontractors.organd click on Legislative Action Center to send a letter to your legislators and the Governor. Feel free to share this information with your employees, who can also use our site to contact their elected officials.
ODOT Meeting Regarding DBE Goal Subdivision
The Ohio Department of Transportation (ODOT) is holding a Public Meeting on December 16th 10am – 12pm at 1980 West Broad Street Columbus, Ohio to discuss the DBE Waiver Request submitted to the US Department of Transportation earlier this year. This request, if approved, would allow ODOT to subdivide DBE Goals on federal projects by race, ethnicity, and gender. Your comments and participation are encouraged. To view the flyer announcing this event, click here. For any questions, please contact Terry Bolden, Administrator, ODOT Office of Outreach at [email protected] or 614-644-8436.
For more information and to register: http://www.dot.state.oh.us/groups/DisparityStudies/Pages/default.aspx
Industry and Labor File Opposing Briefs In SILICA Rule Law Suit
Industry groups reiterated their opposition to OSHA's silica rule, saying in briefs filed in federal court it was costly and unnecessary, while labor organizations said it should apply to more sectors.
The silica rule sets a permissible exposure limit for airborne crystalline silica of 50 micrograms per cubic meter of air (50 µg/m3) for general industry, construction and maritime employers. It cuts in half the previous limit for general industry and is 80 percent lower than the previous construction and maritime industry standard.
In a brief filed November 18th in the U.S. District Court for the District of Columbia, labor groups argued OSHA should have included more sectors in its general industry standard and toughened medical surveillance requirements, among other requests. The court should order the Occupational Safety and Health Administration to reconsider the general industry standard as a result, North America's Building Trade Unions, the AFL-CIO and the United Steelworkers contend.
Industry trade associations, including the National Association of Manufacturers, argued the rule is “a solution in search of a problem” and should be vacated by the court. The industry brief argued that OSHA failed to demonstrate the need for regulation with relevant health data. The brief also disputes OSHA's characterization that there is no “safe” threshold exposure level for silica. The industry groups also say it is economically unfeasible to comply with the standard—one of the criteria for the rule.
“Humans are exposed to silica every day, but do not become ill as a result,” the brief said, and mortality rates for silicosis have declined by more than 90 percent between 1968 and 2010 they said.
Other groups have yet to file briefs in the case.
The U.S. Chamber of Commerce is scheduled to file its response by December 2. OSHA has until February 10 to weigh in, according to court records.
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