HR Lobbying Group Leading the Charge Against Labor Department’s Overtime Expansion

About Mariya Strauss

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With few exceptions, it’s been decades since U.S. employers have had to sit across the bargaining table with their employees’ unions. Now that workers have less ability to protect their own interests, they are more vulnerable to the tricks businesses use to extract ever-greater profits from them, such as wage theft, forced overtime, and other abuses.

Meanwhile, employers and their corporate lobbying groups such as the National Restaurant Association, the National Association of Manufacturers, and the Society for Human Resource Management (SHRM), have grown used to squeezing the most productivity out of the lowest-paid workers—without much interference. They have, either by stacking the regulatory agencies and Congressional committees with corporate insiders (such as former Labor Secretary Elaine Chao), or by presenting themselves as neutral experts on policy instead of industry shills, so successfully managed to kill any new rules or regulations on industry that they profess shock and bewilderment when one manages to get proposed.

Mike Aitken, SHRM VP for Government Affairs.

Mike Aitken, SHRM VP for Government Affairs.

When the U.S. Department of Labor (DOL) proposed a rule on June 30th to expand the pool of workers eligible to receive overtime pay, the Partnership to Protect Workplace Opportunity(PPWO), an ad-hoc (or Astroturf) coalition of employers’ lobby groups chaired by SHRM (pronounced Sherm), had its lawyers draft a letter of shock and dismay, requesting that the DOL extend the comment period for the rule to give employers more time to respond to it.

It was almost a believable performance.

SHRM: Not just a professional association

SHRM, which PRA profiled back in March, is part of the nexus of dark-money corporate lobbying groups blanketing Washington, D.C. and statehouses with talking points and testimony to kill almost every proposed workplace regulations. Though the PPWO doesn’t list any leadership on its website, SHRM revealed in a memo to its members dated November 10, 2014, “SHRM is chairing the Partnership to Protect Workplace Opportunity.”

So far, SHRM has hesitated to publicly take the lead on many anti-worker measures, preferring to allow more overt union-busting groups (such as the U.S. Chamber of Commerce and the International Franchise Association) to come to the fore on public policy. But, with its claim of a membership base of 275,000 human resource professionals, and a multi-million dollar lobbying operation since 2007, SHRM has invested eight years and millions of dollars carefully positioning itself as a neutral, expert authority on workplace-related policies. Yet it uses its influence in Congress to push for measures that may are so blatantly anti-worker, it might even surprise its own human resources members, such as using the appropriations process to defund the National Labor Relations Board—a fight that is indeed coming to pass as of this writing.

They are also actively lobbying to halt such basic protections as the Labor Department’s new rule to raise the threshold for who is considered “exempt” from making overtime pay. (The new rule would extend overtime protections to nearly 5 million workers, who for years have been stuck in an exception meant for high-paid executives and working 50-60 hours every week without any overtime pay.)

In anticipation of such an expansion under the regulate-and-enforce watch of Wage and Hour Division chief David Weil, SHRM has been door-knocking around Capitol Hill and in statehouses, pitching its own legislation to address American workers’ chronic overwork problem—but worker advocates say SHRM’s bill would actually drive down wages.

Replace overtime with “comp time?”

The “comp time” legislation that SHRM supports would benefit employers at the direct expense of workers. In 2012, members of SHRM’s Alabama chapter visited D.C. to meet with members of their state’s Congressional delegation. The following year, Republican Alabama Congresswoman Martha Roby introduced the Working Families Flexibility Act—a bill that would allow employers to offer workers comp time credit (where workers who put in over 40 hours per week earn credit hours to later use as leave) instead of overtime pay. The bill has no enforcement provision to ensure that workers would get anything for working over 40 hours in a week. (Similar bills were previously submitted by Republicans in 1997 and 2003.)

Congresswoman Roby specifically mentioned SHRM’s support has having been “instrumental” in the effort to pass the bill. And although the bill died in the Senate that year, Roby once again reintroduced it in early 2015 with SHRM’s support.

SHRM knew that the DOL was likely going to begin cracking down on this abuse of workers sooner or later. In November 2014, SHRM expressed its worry that the DOL might revise the overtime exemption rule in favor of paying workers more, couching its concern about how complex the law might become when it said in a statement:

“The current FLSA regulations present practical challenges when classifying positions…Rigid FLSA regulations also make it difficult for employers to provide workplace flexibility to nonexempt employees. Substantial changes to the overtime regulations could further limit workplace flexibility for employees.”

But the DOL’s new rule couldn’t be simpler, even for the smallest employers.  Employees may not be considered exempt from overtime unless they make at or above the 40th percentile of all full-time salaried employees ($921 per week, or $47,892 for a full-year worker, in 2013). If an employee makes less than that,  you will have to pay them overtime for working more than 40 hours per week. What is more, you have to pay them overtime even if they make above the 40th percentile unless they are executive, administrative, professional, outside sales, or computer employees.  Application of these criteria for exempting workers from overtime is called the “duties test.”

The new rule will serve to remedy the current situation, with workers making only $455 per week, or about $23,000 per year, being considered salaried and exempted from overtime eligibility. The fact that the exempt salary level has been stuck at this amount since 2004 means that a huge number of people are being expected to work more than 40 hours per week without any additional pay. Under the new rule, employers might be less cavalier about assigning people to come in to work on weekends or stay after hours. (While the salary threshold is definitely being raised, the DOL says it wants input from the public on whether it should change the duties test; it has opened a public comment period that will remain open until Sept. 4 of this year.)

The “regulated community” strikes back? 

SHRM’s astroturf group PPWO’s July 13 request for an extension of the comment period is transparent in its outrage at the Labor Department for having the gall to require that employers pay overtime.  What is clear in the letter is that PPWO interprets the term “workplace flexibility” to mean “flexibility in the law for employers to do as they please.”

“The Partnership’s members believe that employees and employers alike are best served with a system that promotes maximum flexibility in structuring employee hours, career advancement opportunities for employees, and clarity for employers when classifying employees. The DOL’s proposed regulation…would dramatically impact the ability of the Partnership’s members to maintain that flexibility and clarity.

“The proposed massive increase to the salary level—more than doubling the current level—is far higher than the Partnership anticipated…”

Several times in the letter, the PPWO refers to itself as “the regulated community”. This is an interesting lens through which to view the DOL’s action, which was done to update the 1938 Fair Labor Standards Act in favor of giving overtime pay to more workers—not to put employers’ priorities in the foreground.

Yet having their priorities pulled into the spotlight appears to be exactly what the SHRM-led coalition expected from the DOL. The letter angrily concludes:

“The Department could have used the substantial input it received during the 15 months it spent considering the President’s directive to develop a…proposal that was…reflective of the input it received. Instead, it issued a proposed rule that it could have just as easily issued 14 months ago.”

Such posturing shows that employers have grown unaccustomed to government enforcing and updating labor law to protect workers. But given the crisis in U.S. employment, with unions in decline, wages stagnating, and workers being expected to grow the economy by working ever longer hours and increasing their productivity, it is past time for government to do just that.

Eli Lee contributed research to this article.

Mariya Strauss is PRA's former economic justice researcher and a former guest editor for The Public Eye magazine. A Maryland-based freelance writer, her investigative journalism and commentary have been published in The Nation, at the GlobalComment blog, and The Public Eye magazine, among others. You can follow her on Twitter at @mariyastrauss.