PPAI has joined the Partnership to Protect Workplace Opportunity (PPWO), a coalition of associations, businesses and other stakeholders, in its mission of advocating for the interests of its members in the regulatory debate on changes to the Fair Labor Standards Act (FLSA) overtime regulations.

Last week, the Association and 92 other organizations signed onto a PPWO letter to Labor Secretary Marty Walsh urging him to abandon or at least postpone issuance of the Department of Labor’s announced proposed rulemaking altering the overtime regulations under the FLSA.

“This request to the Department of Labor to delay their new overtime rule will help small businesses in the promotional products industry navigate a precarious operating environment,” says Maurice Norris, PPAI’s public affairs manager. “Companies in our industry are still contending with myriad challenges including supply chain backlogs and import tariffs, and the Department of Labor could provide some measure of certainty to small businesses by delaying consideration of their new overtime rule.”

Background: In the Fall 2021 Regulatory Agenda, DOL announced that it planned to issue a Notice of Proposed Rulemaking (NPRM) on the “exemption of bona fide executive, administrative, and professional employees from the Fair Labor Standards Act’s minimum wage and overtime requirements.” These are also known as “white-collar” exemptions.

  • The DOL has held a series of listening sessions over the last few months to obtain input on the potential impact of any changes to the overtime exemption requirements.
  • During these sessions, the PPWO noted, “The economy today cannot support changes to the white-collar exemptions under the FLSA. Due to significant concerns with supply chain disruptions, workforce shortages, inflationary pressures and the shifting dynamics of the American workforce following the COVID-19 pandemic, any rule change now would be ill-advised. Importantly, DOL last updated the overtime regulations only three years ago, which strongly suggests there is no need for urgency in issuing more changes.”

The Letter: In its letter to Secretary Walsh, PPWO called on DOL to abandon or at least postpone issuance of its announced NPRM “until the current economic situation stabilizes and improves to allow the American workforce, employer community, and DOL itself to more fully understand how the pandemic has shifted the paradigm of work in America.”

Factors cited by the PPWO for the cancellation or postponement of the rulemaking include:

  • Industries are still recovering from the impact of the COVID-19 pandemic. Some industries were hit significantly harder than others, including restaurants, the travel industry and workout facilities.
  • Current workforce shortages, supply chain disruptions, economic contraction and inflation are pushing operational costs ever higher.
  • Inflation is at a 40-year high.
  • Supply chain pressures continue.
  • Businesses cannot hire enough workers to operate at full capacity.
  • Economic contraction in some sectors and the specter of both inflation and a recession are ever-present.

Complicating Matters: Many businesses are not well-positioned to absorb new labor costs associated with changes to the overtime pay regulations, and such changes would only exacerbate the difficulties businesses are currently facing.

PPWO also pointed to the move towards remote, hybrid or part-time work as a complicating factor in compliance with potential changes to the white-collar exemptions. To comply with overtime regulations, employers will be obligated to monitor non-exempt employees’ worktime, but that may not be compatible with these new workforce dynamics.