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Report: Obama Labor Regulators Set for Big Changes That Help Unions, Hurt Businesses and Jobs

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A new report from the Competitive Enterprise Institute outlines how the Obama administration is working to make major, unilateral changes to labor policies to reward its labor union allies.

“President Obama, in the waning months of his administration, is trying to push through major new regulations that benefit his labor union friends but have massive, detrimental effects on the economy and people’s jobs,” said Trey Kovacs, CEI policy analyst and author of the report. “This is happening at a time when some 6.5 million workers are seeking full-time employment

“From regulations upending franchise and contract businesses, to rushing through labor union representation votes, to imposing new overtime rules, President Obama is using regulatory agencies to make major policy changes he can’t get through Congress,” said Kovacs. “Congress should consider defunding the enforcement of these new regulations.”

The CEI report addresses the top three regulatory threats to labor policy:

National Labor Relations Board (NLRB) Aims to Redefine Joint Employer Standard. The Obama administration is seeking to redefine the concept of joint employment to give unions bigger corporate targets that are easier to organize. Rather than organize one franchise business at a time, the National Labor Relations Board is trying to give unions the ability to drag the parent corporation to the bargaining table. This forced consolidation would disrupt many kinds of beneficial business arrangements in addition to franchises, including temporary and staffing agencies and contractors. It could also make businesses an easier target for trial lawyers.

NLRB Ambush Election Rule. In April, the NLRB implemented a new regulation for union representation elections that threatens workers’ freedom of association and privacy, while hindering employers’ protected speech on unionization prior to an election. The rule would shorten the time frame between the filing of a petition and the date on which an election is held, reducing it to as little as 14 days. The short time frame gives employees little time to educate themselves on the pros and cons of unionizing and undermines employers’ ability to respond to union organizing campaigns.

Department of Labor Proposed Overtime Rule. On June 30, 2015, the DOL submitted a Notice of Proposed Rulemaking to significantly modify the exemptions in the Fair Labor Standards Act’s overtime rules. The DOL’s proposed rule will dramatically alter who is eligible for overtime pay. Proposed requirements would extend mandatory overtime payments to salaried employees who earn $50,440 annually or less, up from the current threshold of $23,660. It would even cover workers who perform mainly professional or managerial tasks. The rule will not actually raise wages and is likely to have many unintended consequences. It would force employers to adjust work schedules and reclassify workers, among other potential changes. Employer compliance obligations could increase due to employing more hourly and non-overtime exempt employees whose hours must be tracked to calculate overtime pay.

The report urges Congress to exercise its power of the purse to end the assault on workers and the economy.

> View the report, Federal Labor Agencies Ambush American Economy; How the Department of Labor and National Labor Relations Board Support Big Labor, Not the American Worker