Trump Adviser: OT Rule ‘Very Harmful to Job Creation’

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By Ben Penn

Oct. 20 — A high-ranking adviser to Donald Trump said that the Labor Department’s overtime regulation will limit job growth, but he declined to say whether Trump would immediately overturn the rule if elected president.

“Trump has said that that’s a harmful regulatory change,” David Malpass, senior economic adviser to the Republican presidential candidate, told reporters after an Oct. 20 National Economists Club discussion. The “regulation is very harmful to job creation because it forces companies to rethink whether they’re going to hire people, and the companies around the country begin reducing their hiring in anticipation of that Dec. 1 deadline.”

When asked by Bloomberg BNA if a President Trump would attempt to repeal the rule as soon as he’s in office, Malpass said, “The lawyers get involved heavily in” assessing the “best options for the public.”

The rule, which doubles the salary threshold below which workers are eligible for time-and-a-half pay when working more than 40 hours in a week, takes effect Dec. 1.

Business efforts to thwart the regulation in Congress and the courts face long odds, leaving opponents to consider a Trump presidency as another avenue for relief from the DOL’s rule. Trump trails in the polls to Democratic nominee Hillary Clinton, who supports the rule.

Trump told online publication Circa in August that he would attempt to delay or exempt small businesses from the overtime regulation, but he has yet to declare whether his administration would try to have the entire regulation repealed.

Regulations ‘Manipulate the System.’

Malpass pointed to several Obama administration regulations scheduled for implementation shortly after the election, calling them part of an effort to “manipulate the system so that the consequences don’t fall on the current administration.”

“I think there would be a strong effort in a Trump administration to have recent regulations and even older ones improved on,” added Malpass, who held senior agency positions under Presidents Ronald Reagan and George H.W. Bush.

A Trump administration would pursue a variety of economic policies, including trade and tax revisions, all designed to prioritize growth, he said.

Malpass also said Trump would discontinue what he called Obama’s regulatory overreach. “The regulatory policy of course has mushroomed into this giant industry in Washington,” he said.

Mid-Level Workers Targeted for Boost

The DOL intends the overtime regulation to improve the lives of many mid-level workers, either by bringing them overtime pay or raising their salary above the new threshold of $47,476. If companies opt to prevent overtime-eligible workers from exceeding 40 hours, that’s a win for the employees’ families, too, the administration has said.

The agency estimates 4.2 million workers will become newly eligible for overtime once the rule is implemented. Obama declared in May that the regulation “is the single biggest step I can take through executive action to raise wages for the American people.”

But Malpass’ concerns about the rule echo the arguments of Republicans and business lobbyists that the regulation is too expensive for some employers, who may be forced to neutralize the costs by cutting jobs.

When the overtime rule was finalized in May, Clinton issued a statement applauding the measure as a step toward fueling higher income. “Within the first year these rules are in effect, millions more workers will be eligible for overtime, finally getting paid in full for the hours they are putting in on the job,” the statement said.

To contact the reporter on this story: Ben Penn in Washington at bpenn@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com

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