The Honorable Julie A. Su, Acting Secretary, U.S. Department of Labor (September 28, 2023)

Summary

A letter dated September 28, 2023 from the House Committee on Small Business to Julie A. Su, Acting Secretary of the U.S. Department of Labor, about the recent proposed rule change to the Fair Labor Standards Act (FLSA). The letter states that the proposed rule would raise the threshold for time-and-a-half overtime pay from $35,568 to $55,000, and that it appears the DOL may not have properly considered small entities. It requests information by October 12, 2023 in numbered questions, including on the data used to estimate affected small businesses, the time to become familiar with the rule, and alternatives to lessen impacts. The signature block names Roger Williams, Jake Ellzey and Aaron Bean.

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Full text

                                            September 28, 2023

The Honorable Julie A. Su
Acting Secretary
U.S. Department of Labor
200 Constitution Ave. NW
Washington, D.C. 20210

Dear Acting Secretary Su:

        The House Committee on Small Business (the Committee) writes to inquire about the
recent proposed rule change to the Fair Labor Standards Act (FLSA). This proposed rule would
expand eligibility for overtime pay for about three million workers under the FLSA.1 It would
raise the threshold for time-and-a-half overtime pay from $35,568 to $55,000.2 The Department
of Labor (DOL) estimates that the rule would affect 1.3 million workers who are employed by
between 179,700 and 1.3 million small entities; comprising from 2.8 percent to 20.8 percent of
all small entities.3 This change will cost direct employers between $294.6 million to $356.0
million for affected small entities just during the first year.4 It appears that the DOL may not
have properly considered small entities during this rulemaking process.

       It is important for agencies to examine small businesses interests—which make up 99.9
percent of all businesses in the United States—when passing any new rule. America’s small
businesses deserve to have their voices heard and considered. We therefore request the following
information as soon as possible but no later than October 12, 2023:

    1. According to the proposed rule, there is no data available to determine whether small
       businesses are more or less likely than non-small businesses to employ exempt EAP
       workers or affected EAP workers.5 The DOL states that the best assumption available is
       to assign the same rates to all small and non-small businesses. How did the DOL come to
       this conclusion?




1
  Fair Labor Standards Act, (2023) Mental Health Parity and Addiction Equity Act, 88 FR 51552 (2023) (to be
codified at 29 CFR Part 541).
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The Honorable Julie A. Su
September 28, 2023
Page 2 of 3

        2. The DOL uses data from 2017 to estimate the number of impacted small businesses.6
           This data is already six years old and is out-of-date. Does the DOL have any more recent
           data to verify these numbers?

        3. The DOL estimates that it would take only an hour for each entity to become familiar
           with the content of this rulemaking. However, since small entities often have limited
           human resources or legal personnel on staff, how did the DOL reach the conclusion that it
           will only take an hour?

        4. The DOL expects that small entities would rely on compliance assistance materials
           provided by the DOL or industry associations to become familiar with the final rule.7
           Where exactly can small businesses access these materials and what materials are
           provided?

        5. The DOL estimates that the rule would affect 1.3 million workers who are employed by
           between 179,700 and 1.3 million small entities; comprising from 2.8 percent to 20.8
           percent of all small entities.8 This is an unacceptable large range. Does the DOL expect
           the number of affected small entities to be closer to 1.3 million or 179,700?

        6. The proposed rule states that it is possible that the costs of the proposed rule are
           disproportionately large for small entities.9 What alternatives have been considered to
           lessen the impacts on small businesses?

       To schedule the delivery of your response or ask any related follow-up questions, please
contact Committee on Small Business Majority Staff at (202) 225-5821. The Committee on
Small Business has broad authority to investigate “problems of all types of small business” under
House Rule X. Thank you in advance for your cooperation with this inquiry.

                                            In God We Trust,




_________________________                                _________________________
Roger Williams                                           Jake Ellzey
Chairman                                                 Member of Congress
Committee on Small Business                              Committee on Small Business




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The Honorable Julie A. Su
September 28, 2023
Page 3 of 3



_________________________
Aaron Bean
Member of Congress
Committee on Small Business




cc:    The Honorable Nydia M. Velasquez, Ranking Member
       Committee on Small Business


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