The White House
Washington, DC 20500
Dear Mr. President:
On behalf of Business Roundtable and our member companies, I want to express our appreciation for your open communication and partnership as we work to find policy solutions that strengthen our economy and boost job creation. In particular, we note our recent successful efforts to enact Trade Promotion Authority (TPA) into law, as well as our discussions regarding regulations of concern to our member CEOs.
As you know, Business Roundtable is a strong advocate for smart regulations that provide greater clarity regarding the costs, benefits and cumulative burdens placed on America’s job creators. Simplifying and strengthening our regulatory system will drive increased business investment, economic growth and job creation – top priorities for our organization and your Administration.
I wanted to take this opportunity to note two recently proposed regulatory changes – on contractor reporting requirements and changes to overtime rules – that present concerns for our CEOs. While Business Roundtable supports the overarching goals of these rules, we believe they can be achieved through less burdensome means that prevent unintended, negative consequences to our members’ companies, the economy and national security.
Contractor Reporting Requirements
Every day, our nation relies on federal contractors to accomplish critical tasks, from providing support to our nation’s military to building critical infrastructure that safeguards classified information. Given the nature of this work, Business Roundtable has serious concerns about how the proposed rule on contractor reporting would impact the already complex and burdensome federal procurement process.
For example, the proposed rule’s requirement that contractors regularly report on three years’ worth of information on any claims against it– or its subcontractors – has the practical effect of requiring all contractors to create separate, enterprise-wide systems capable of tracking and reporting such information. This would impose significant costs, especially since not a single Business Roundtable member reports having such a system in place. In our view, it would be far more efficient to use the contractor data already being collected by several agencies at the federal level.
Even more troubling, the proposed rule’s requirement that contractors report violations that never received final judgment treads on contractors’ due process rights. Since all claims would be reportable as “violations,” the rule would effectively stigmatize companies for claims that may be found to lack merit. Furthermore, by making contract decisions contingent on the status of these reported labor “violations,” the rule exerts significant pressure on employers to settle meritless claims, an unfair price to pay to remain competitive in the federal contracting marketplace.
With respect to the new proposed rule on overtime eligibility, Business Roundtable supports efforts to update and modernize current rules and regulations. The proposed regulation, however, would take many false steps that would hinder, not help, American workers.
To begin, the proposed salary threshold increase – more than doubling it from $23,660 to $47,892 – is far out of proportion with prior, more reasonable increases. Such a drastic change could instantly terminate the exempt status of more than 5 million workers, with several unintended, negative consequences.
Tracking employee work hours for this swelling portion of the workforce would present significant challenges for employers, ultimately resulting in less flexibility and fewer benefits for employees. The ability to work remotely, or even use technologies like smartphones, could disappear as employers grapple with accurately tracking work time for this once-exempt cohort. For American workers, this would mean choosing between skipping their children’s soccer games and dance recitals and receiving a smaller paycheck at the end of the month.
We are also concerned about the Department of Labor’s request for comments regarding changes to the duties test, which is the second component along with salary in determining overtime status. While changes to the test may be merited, they should be proposed in a separate Notice of Proposed Rulemaking, consistent with the Administrative Procedure Act.
Business Roundtable has sent comment letters that fully outline our concerns to the proper agencies. However, we wanted to share these top-level concerns with you directly in anticipation of our next opportunity to discuss them and other regulations of concern. Building on our recent TPA victory, we look forward to working together to find even more solutions that keep America moving forward.
President, Business Roundtable