What compliance costs might distributors expect because of the Department of Labor’s new overtime rule? How are those going to complicate things for an industry that is already facing worker shortages?
The one-size-fits-all overtime rule ignores regional marketplace discrepancies and reduces both employee and employer flexibility, ultimately resulting in reduced opportunities for employee growth. But perhaps the worst part of the rule is the precedent-setting practice of automatically raising the non-exempt income threshold every three years regardless of economic conditions at the time.
Compensation models have evolved to the benefit of workers over the last several years. Factors like commissions, bonuses, out-of-office flexibility, and increased training opportunities are now part of compensation decisions. This rule ignores those advances and treats all workers the same. In an industry that prides itself on company culture and long employee tenure, this rule complicates and likely slows growth in recruiting and rewarding new workers. In some cases, the result is moving a salaried employee backward in their management trajectory and returning them to an hourly employee. The cost of compliance includes identifying and reclassifying members of the workforce not just now, but every three years as the wage threshold continues to rachet up.
Why is there so much concern over OSHA’s new worker walkaround rule? How is it expected to impact distributors and open the door to union organizers?
At best, the walkaround rule is a solution in search of a problem. At worst it is a backdoor for union organizers or competitor businesses to get access to distributors’ facilities and employees to give them a free “look under the hood.” The rule allows employees in unionized or non-unionized shops to name a third party to enter a worksite and accompany the compliance safety and health officer (CSHO) on an inspection, allowing labor unions, community organizers, activists, competitors, etc., to enter a wholesaler-distributor’s facility for reasons unaffiliated with workplace safety and health. This is now the law of the land and companies need to update their plans for an OSHA inspection and learn what rights they have to limit access within a facility to protect trade secrets and property rights. The rule is new, and the NAW’s Legal Policy Center is challenging it in court. But while we await a decision it is definitely something that distributors’ general counsel and safety officers should be discussing.
Two federal district courts are reviewing the FTC’s new noncompete agreements ban and granted preliminary injunctions. What can we infer about the likelihood of the ban being struck down from these injunctions?
WE WON! This was a big win for the business community and a feather in the cap of our Legal Policy Center.
The 2017 Tax Cuts and Jobs Act is set to expire at the end of 2025, which would result in a significant tax increase on businesses. What are some ways NAW is pushing legislators to take up this vital issue? What feedback have you gotten so far?
No matter who wins the election in November, we will have a debate over tax reform next year. In 2017 when Congress passed and President Trump signed into law the Tax Cuts and Jobs Act, they put a sunset on the individual and small business tax cuts included in the bill. Meaning if Congress does nothing next year personal income taxes and tax brackets return to the 2016 rates. In addition, s-corporations, partnerships and other businesses that file taxes as pass-thru entities will lose the 20 percent small business deduction. While the 21 percent corporate tax rate enacted in the TCJA is permanent, pass-throughs could face a tax rate of 39.6 percent.
Layering in politics, there are members of Congress
from both parties that want to increase the corporate tax rate, and Vice President Harris supports raising the rate to 28 percent. NAW has been working behind the scenes to get ahead of this debate, spending much of the last year walking the halls of Congress educating members on the negative impact tax increases will have on growth and the economy. We have met with hundreds of members and helped create the Mainstreet Employers Coalition, which includes dozens of organizations fighting the same fight. In addition, NAW chairs the LIFO Coalition to defend against efforts to repeal LIFO (last in, first out) accounting that is often targeted as a “pay for” to offset tax cuts elsewhere. This will be a long and difficult debate, but we are ahead of the curve and working hard to educate members and staff on the impact.
24 FEDA News & Views
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