PIA recently joined letters to oppose two harmful federal rules proposed by the Department of Labor (DOL). The first rule, titled “Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees,” would change overtime regulations under the Fair Labor Standards Act (FLSA), and harm employers and employees alike. The second rule sets the enforcement standard DOL will use for determining whether a worker is an employee or independent contractor.

                                    Overtime Rule

If finalized, DOL’s Proposed Rule will substantially and negatively impact both the private and public sectors, as well as the workers they employ and the communities they serve. DOL’s rule would force the reclassification of millions of employees from salaried to hourly workers. This change means these employees could lose access to vital benefits, opportunities for career advancement, and accommodating work arrangements. These consequences will be disproportionally felt by entry level workers, especially those in rural areas.  

PIA supports the Overtime Pay Flexibility Act (H.R.7367), introduced by Rep. Eric Burlison (R-MO), which would protect workers, employers, and the economy from this ill-advised regulation while preserving DOL’s authority to make future adjustments to the overtime rules as appropriate.

                                  Independent Contractor Rule

The new rule will replace the current worker classification rule (the “2021 rule”). The 2021 rule established a guidance standard based on a review of decades of legal precedent which found that courts had consistently relied on two core factors when deciding worker classification issues under the FLSA. DOL’s new rule will abandon the two core factors of the 2021 rule and instead rely on any of six different factors to determine employee status—an approach that inserts subjectivity and uncertainty into worker classifications. The new rule will result in confusion and invite frivolous litigation that could have a dangerous effect on independent work opportunities. This will be particularly problematic for small businesses that rely on independent contractors.

PIA supports H.J. Res 116 and S.J. Res 63, Congressional Review Act resolutions which will nullify DOL’s confusing and harmful rule.