During the Obama administration, Republicans in Congress criticized the Department of Labor for its pro-union activism and economically crippling government mandates that hurt worker opportunity and job creators.
Labor regulators imposed $55 billion in regulatory costs and 70 million paperwork burden hours over the past eight years, along with policies that often favored "Big Labor" over workers or employers.
But when it came time to rally behind a proven job creator who understood these concerns better than most, a handful of Senate Republicans failed to support President Trump’s nominee for labor secretary.
Andrew Puzder is a successful businessman who has been an outspoken foe of government barriers to economic success. But Republicans buckled amid labor union pressure and a cloud of personal controversies, prompting Puzder to withdraw from consideration on Feb. 15.
The next day, President Trump put forward a new nominee, Alexander Acosta, current law school dean and former member of the National Labor Relations Board. So far, it appears Acosta will escape the sort of attacks that felled Puzder. In fact, AFL-CIO President Richard Trumka has already said Acosta’s “nomination deserves serious consideration.”
But while Acosta may not face a tough confirmation process, steering the Labor Department in the right direction is a far bigger and more important challenge. As the Senate considers Acosta’s nomination, senators should ask some pointed questions about priorities.
First, the new Labor secretary must recognize that small businesses are drowning in red tape and a lot of people are out of work. Under the Obama administration, for the first time in 35 years, there were more American business deaths than business births. That’s a big problem, since small businesses are the main drivers of new job creation.
We desperately need those new jobs. A shocking number of working age males, age 25-54, are absent from the workplace, with 7 million no longer seeking employment and another 2 million unable to find work. That means economic insecurity for millions of families in America.
Second, the next labor secretary must see that the economy and the workplace are changing. Employers and workers need flexible rules that allow them to innovate. Acosta must lead the way and break with Obama administration policies that harkened back to the past.
Those policies doubled down on rigid wage and hour laws and restricted flexible work and business arrangements. People care about their income, but they also care about flexibility in scheduling, working hours, and work environment.
Third, the next Labor Secretary must take steps to toss out the Obama administration’s overtime rule, which imposed a dramatic new mandate on employers, large and small, to pay more to salaried employees or look for cuts. The rule, which was halted temporarily by a court late last year, is poised to inflict huge, unbudgeted costs on businesses.
That means many employees could end up receiving a demotion from salary to hourly status, a reduction in hours, less workplace flexibility (like telecommuting options), or some combination of the three.
The overtime rule may have been touted as a way to raise millions of workers’ wages, but what the press release trumpets, the fine print takes away. The rule itself stated that its two top policy objectives were to incentivize employers to hire more people and reduce hours to avoid overworking employees.
Fourth, the labor secretary should move quickly to withdraw overreaching “guidance” rules issued by the agency. For example, the Labor Department’s Wage and Hour Division issued guidance that greatly expanded the definition of “employee” and restricted independent contracting opportunities, immediately jeopardizing the ability of workers to be their own boss and schedule their own hours.
Similarly, the labor secretary should undo Obama-era changes to joint employer liability. The department’s guidance document established new guidelines for holding one company jointly liable for the labor violations of another.
This policy will have a chilling effect on employers that outsource noncore business functions, like accounting or human resources, and force them to bring those activities in-house, at a higher cost. That means businesses will be able to devote less time and resources to their core functions. In the end, that means fewer jobs for workers and fewer opportunities for small business entrepreneurs.
People are still hurting from the Obama economy. The last administration’s labor policies placed severe restrictions on businesses and made it harder for people to find good jobs. The next labor secretary needs to relieve the U.S. economy and American workers from restrictive policies that increase costs and reduce opportunity.
When people have the freedom to pursue their passions and innovate, they have the best chance to build financial security and live their own American Dream.
Originally posted at The Hill.