House passes bill to stall overtime

With help from Mel Leonor

HOUSE PASSES BILL TO STALL OVERTIME: The House voted 246-177 to delay by six months implementation of the Labor Department’s overtime rule. Republicans voted unanimously for the bill, along with five Democrats: Reps. Brad Ashford of Nebraska, Henry Cuellar of Texas, Daniel Lipinski of Illinois, Collin Peterson of Minnesota, and Kyrsten Sinema of Arizona. Rep. Kurt Schrader (D-Ore.), who introduced an earlier bill to phase in the overtime threshold gradually over three years, voted against the six-month delay. The rule, set to take effect in December, will double (to $47,476) the salary threshold under which virtually all workers are guaranteed time-and-a-half pay whenever they work more than 40 hours in a given week. The Labor Department estimates the rule will extend overtime coverage to more than 4 million employees and cost businesses about $1.2 billion annually.


Prior to the vote, Rep Tim Walberg (R-Mich.), who introduced the legislation, said the overtime rule “burdens hard-working small business owners” and “jeopardizes vital services for vulnerable Americans.” He warned that “time is running out” and said lawmakers should “provide more time to those struggling to implement this rule before an arbitrary and unrealistic deadline.” But Rep. Bobby Scott (D-Va.) said the rule will create about 100,000 jobs and noted that when the overtime rule was last updated in 2004 under President George W. Bush, “only four months” passed between the final rule’s announcement and its implementation (compared to more than six months for the new rule). Rep. Mark Takano (D-Calif.) said the bill “takes money out of middle class Americans right before the holiday season.” He also objected to the bill being brought to the floor as an emergency measure.

Sen. James Lankford (R.-Okl.) introduced a companion bill Wednesday co-sponsored by Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) and Sen. Susan Collins (R-Me.). Neither the House nor the Senate bill will likely go anywhere. The White House said Tuesday that President Barack Obama would veto Walberg’s bill.

GOOD MORNING. It's Thursday, Sept. 29 and this is Morning Shift, POLITICO's daily tipsheet on labor and employment policy. Send tips, exclusives, and suggestions to [email protected], [email protected], [email protected], and [email protected]. Follow us on Twitter at @marianne_levine, @CoganSchneier, @melleonor_, and @TimothyNoah1.

GDP UP 1.4 PERCENT IN SECOND QUARTER: GDP grew 1.4 percent, in the second quarter of 2016, the Commerce Department reported today. The growth rate was higher than a previous estimate of 1.1 percent and an initial estimate of 1.2 percent. It was also higher than the first quarter of 2016’s 0.8 percent but lower than the fourth quarter of 2015’s 1.4 percent. The Commerce Department attributed the second quarter’s acceleration to gains in personal consumption expenditures, exports and nonresidential fixed investment, like purchases in new construction, equipment and software.

A Bloomberg survey of economists had predicted second-quarter growth would be 1.3 percent. The Commerce Department’s first cut at estimating third quarter growth will be October 28.

TODAY: OBAMA ADMINISTRATION ROLLS OUT PAID SICK LEAVE, FINAL PAY DATA PROPOSAL: The Obama administration is expected to roll out two final rules this morning:

-DOL PAID SICK LEAVE FOR FEDERAL CONTRACTORS: The Labor Department will release a final rule today to implement a 2015 executive order that requires federal contractors to offer their employees at least seven paid sick days per year. Under the rule as proposed, employees may use paid sick days for themselves or for a sick family member for absences related to illness or pregnancy, sexual assault, domestic abuse, or stalking. DOL estimates the rule will extend paid sick leave to 828,000 people and will cost $184 million in compliance costs over ten years.

-FINAL EEOC PAY DATA PROPOSAL: The Equal Employment Opportunity Commission will issue a final regulation to require businesses to disclose extensive information on employee compensation. In the proposed version of the rule, issued in February, businesses with 100 or more employees would have to submit pay data by race, ethnicity, and gender on an EEO-1 form that they’re already required to submit. (The current EEO-1 requests demographic information about employees in ten job categories). The EEOC issued a revised version of the rule in July to give employers more time to submit 2017 reports, extending the deadline to March 31, 2018. The agency estimated that the proposed rule would increase the annual cost to all businesses of completing an EEO-1 by $25 million, and would also impose a one-time compliance cost of $27 million. The EEOC says the rule will help the agency identify pay discrimination patterns; business groups, including the U.S. Chamber of Commerce, disagree, arguing the proposal will only create additional paperwork.

TODAY: BROWN TO SIGN STATE IRA BILL: California Gov. Jerry Brown will sign legislation today that will require businesses with at least five employees either to offer a retirement savings plan or to enroll their workers in a state-based retirement savings program overseen by a state board. Private companies will handle much of the administrative work, James Rufus Koren reported earlier this month in the Los Angeles Times. About seven million California workers will be eligible to participate in the program, which is expected to start enrolling employees in 2018. California is among a handful of states that are experimenting with state-based retirement programs, a trend likely to expand now that states have received clarification from the Labor Department about the circumstances under which such programs are exempt from the Employee Retirement Income Security Act.

DOL OIG DIGS INTO CONSTRUCTION AUDITS: The Labor Department’s Office of Inspector General announced earlier this week that it will launch two new audits of the Wage and Hour Division and Office of Federal Contract Compliance Programs focused on activities related to the construction industry. The OFCCP investigation will consider the “adequacy” of the agency’s enforcement of construction contract requirements. The WHD investigation will look into the accuracy of Davis-Bacon prevailing wage determinations, and whether the division “adequately monitored the wage survey process to ensure the agency met its performance goals.” The OIG’s letter to OFCCP is here, and the letter to WHD is here.

USC FOOTBALL PLAYER SUES PAC-12, NCAA AS JOINT EMPLOYERS: Former University of Southern California linebacker Lamar Dawson sued the NCAA and Pac-12 as joint employers of Division I football players earlier this week, reports the L.A. Times’ Nathan Fenno. Dawson’s class-action lawsuit alleges that the NCAA and Pac-12 violated the Fair Labor Standards Act and California labor law by not paying players minimum wage or overtime. The NCAA disputed the lawsuit, arguing that players were students (true) and “very focused on their academic endeavors” (well…). The National Labor Relations Board declined last year to rule on whether football players at Northwestern who received grant-in-aid scholarships were employees. In a footnote to the board’s August decision in Columbia University (which said graduate student teachers could be both employees and students), the board said it “denied the protections of the [National Labor Relations Act] to certain college athletes — without ruling on their employee status — because, due to their situation within and governance by an athletic consortium dominated by public universities, we found that our extending coverage to them would not advance the purposes of the [NLRA]." Dawson’s complaint, however, alleges the players are employees because schools and leagues reap large financial gains from their labor. More here.

But that’s not all, sports fans. Law360’s Diana Novak Jones reports that judges on the Seventh Circuit Court of Appeals seemed reluctant to revive a class action lawsuit filed by two University of Pennsylvania student-athletes against that school and others, as well as the NCAA. Lawyers for track and field runners argued before the court Wednesday that “playing a college sport could be classified as work deserving minimum wage pay under the Fair Labor Standards Act.” The judges asked what proof the lawyers had that the lawmakers who crafted the FLSA meant for college athletes to qualify. Novak Jones writes, “Circuit Judge David Hamilton said he typically thinks in terms of opposites when attempting to define [‘work’]. ‘Its most obvious opposite is ‘play,’ ’Judge Hamilton said.” The full story is here.

ELEVENTH CIRCUIT: FLSA, STATE LAW CLASS ACTIONS CAN MOVE TOGETHER: The Eleventh Circuit Court of Appeals joined the Second, Third, Seventh, Ninth, and D.C. Circuit courts Wednesday in ruling that a collective action brought under the Fair Labor Standards Act and a state-law class action may be maintained in the same proceeding. In the case, employees had brought a class action lawsuit against a Florida county sheriff, alleging minimum wage and overtime violations under both the FLSA and Florida’s Minimum Wage Act. A lower court had ruled that, because the FLSA required plaintiffs to “opt in” to be considered class members, and the Federal Civil Rule of Procedure (which allows for class actions asserting state wage violations) required plaintiffs to “opt out” if they didn’t want to be included, the two actions were “mutually exclusive and irreconcilable” and the employees could not bring both. But the Eleventh Circuit panel disagreed. While an FLSA class action and state-law class action may be “fundamentally different creatures,” they are not “irreconcilable,” wrote Judge Beverly Martin. “The FLSA’s plain text does not indicate that a collective action and a state-law class action cannot be maintained at the same time.” The full decision is here.

IN FREE TRADE, BENEFITS DON’T TRICKLE DOWN: Challenging long held beliefs about the power of free trade to boost economies, the New York Time’s Peter Goodman reports that across the world, free trade hasn’t delivered benefits for low-wage, low-skill workers. An “outside share” of the winnings have been concentrated at the top, while laborers carry the burden of joblessness due to disappearing industries — without cushions. Frustration in communities decimated by industries replaced with trade has fueled support for presidential candidate Donald Trump, who has repeatedly vowed to return jobs to the U.S. from China and Mexico. It may also account for Hillary Clinton’s about-face on the Trans-Pacific Partnership. Read more.

STRIKE AHEAD: Chicago teachers will strike on Oct. 11, barring a resolution over a contract renewal on the table for two years. Ahead of the announcement Wednesday night, the Chicago Board of Education authorized a $15 million emergency plan to shelter and feed students if teachers walked off the job. "I'm hoping that you'll find some money to fund the contract," Chicago Teachers Union President Karen Lewis said, according to the Chicago Tribune. The decision to strike is backed by a vast majority of teachers. Talks of a strike boiled over last month when Chicago Public Schools released a $5.4 billion budget that relies on the union agreeing to a contract it previously rejected. That contract would offer net raises over four years while phasing out a 7 percent pension contribution that CPS has been making on members’ behalf. If CTU moves ahead with the strike, it’ll be the second time a teacher strike has shuttered schools during Mayor Rahm Emanuel’s time in office. Read more.

COFFEE BREAK

— “Exclusive: Uber to move freight, target trucking for the long haul,” from Reuters.

— “These maps show how immigrants affect your state’s budget,” from The Washington Post.

— “Chipotle hit with $7.65M verdict in sexual harassment suit,” from Law360.

— “Labor lawyers begin preparing businesses for Zika-related workers’ compensation claims,” from the Miami New Times.

— “Why Starbucks doesn’t franchise,” from Business Insider.

THAT’S ALL FOR MORNING SHIFT.

Follow us on Twitter Rebecca Rainey @rebeccaarainey