You’ll be forgiven if you’ve lost count. It can get confusing keeping track of the all the rules and regulations the Obama administration has put forward that make growing a business and managing your workforce more difficult and more expensive.
The latest in a long list of bad ideas came down Tuesday, with word that the administration proposes to radically overhaul the regulations surrounding overtime pay, raising the salary cap for those workers who can be eligible for overtime by working more than 40 hours in a week.
The White House says that by lifting the salary cap to just over $50,000 annually and pegging it to inflation, that millions of U.S. workers will be eligible for additional pay. Playing the populism card might earn the administration a few more retweets and “likes” on Facebook, but it means bad news for employers’ bottom lines.
Talk about an unfunded mandate. There’s no indication from the White House as to how it proposes businesses absorb the new costs. Unfortunately, the options aren’t good ones for employers or employees. Employers could move workers into positions that pay less, or could limit their hours, setting up a perverse incentive to keep employees at less than full time.
The regulatory hits to employers and their workplace keep on coming.
The administration and National Labor Relations Board have backed ambush elections, whereby labor unions can quickly call for union organizing elections in the workplace. What once took 45 days, can now be done in as few as 10 days.
The NLRB also is moving to completely dismantle the franchise business model that has been the path to prosperity for so many entrepreneurs. NLRB lawyers have taken the position that parent companies are “joint employers” with their franchisees. According to the labor board, what happens in individual business locations should now be the responsibility of company headquarters. Labor unions are buoyed by the prospect of organizing entire industries where any division between the local shop and the corporate parent fades away, while entrepreneurs are faced with losing the independence they enjoy by running their own small business.
All of this is happening amidst the steady drumbeat of the president’s calls for a hike in the federal minimum wage. While Congress won’t go along with the White House on higher wage mandates, businesses are navigating higher minimum wages at a state and city level across the country.
Extending overtime to more employees, mandating higher wages and creating a labor environment that makes managing a workforce more difficult all makes running a business more expensive. When employment gets more expensive, you get less of it. Everyone should be concerned about the chilling effect these regulations will have on businesses’ ability to hire new employees, to offer them more hours and to promote them to higher paying positions.
The administration says backing these policies is good for workers and the middle class. But the president fails to acknowledge the harm he’s inflicting on so many of the people he claims to want to help.
Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce & Industry.
The Arizona Chamber of Commerce & Industry is committed to advancing Arizona’s competitive position in the global economy by advocating free-market policies that stimulate economic growth and prosperity for all Arizonans. http://www.azchamber.com/.