NAWRB Responds to Proposed Rule on Overtime Eligibility

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The Honorable Thomas E. Perez
Secretary, Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210

The Honorable Dr. David Weil
Administrator, Wage and Hour Division
Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, DC 20210

Re: National Association of Women in Real Estate Businesses (NAWRB) Comments:
“Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees; Proposed Rule and Request for Comment”

Dear Secretary Perez and Administrator Weil,

Thank you for the opportunity to provide comments on the Notice of Proposed Rulemaking (NPRM) focusing on increasing the overtime eligibility for millions of Americans who are currently classified as exempt workers.

The National Association of Women in Real Estate Businesses (NAWRB) is the most visible women’s trade association specializing in the housing economy. NAWRB is dedicated to providing women the tools and opportunities for economic growth and expansion, while advocating and promoting women-owned businesses in housing. We are the only third-party industry-specific certifier of Women-Owned Businesses (WOB) and Minority Women-Owned Businesses (MWOB) in the housing economy.

NAWRB provides a unique platform for uniting Women in Housing and Women in Government including educational training on contracting opportunities, both government and private, to expand our members’ business growth.

NAWRB empowers women in our advocacy relationships with the Office(s) of Minority and Women Inclusion (OMWI), Government Sponsored Enterprises (GSEs), the Small Business Administration (SBA), the National Women’s Business Council (NWBC) and other organizations. Since August of 2010, NAWRB has been championing OMWI to bring more diversity and inclusion to our industry with the awareness, opportunities and access they afford.

In regards to the NPRM, it is our contention that the changes it will effect in overtime eligibility will have an immensely debilitating effect on small businesses. In support of this stance, we offer the following comments:

With the proposed rule, the salary threshold for employees eligible for overtime pay would change from $23,660 to $50,440 in 2016 and be updated every year.

Small companies, like most of our members, will not be able to function successfully under the proposed provisions. They would be forced to change their operations in ways that would effectively prevent their company’s progress. Several of our members employ workers who are salaried and often dedicate time outside regular work hours to perform their job duties. These companies do not have the means to raise salaries to the new threshold, and would be significantly affected if they had to pay their employees overtime for the time they choose to dedicate to their work outside of the workday.

It is our belief that countless small businesses will be negatively affected in similar ways to our members. Unable to promote their employees to the proposed salary, small businesses will have to pay significant amounts in overtime, or eliminate overtime altogether and not be able to perform necessary work outside of regular work hours. Some businesses may even find that they are unable to support full-time workers, and have to hire part-time workers instead. This would hurt not only the business, but also the workers who rely on full-time wages.

The real estate industry in particular will be damaged by the proposed rule. Most real estate professionals are self-employed or work with independent contractors, a fact that sheds light on two truths: The first being that self-employed professionals are working diligently to make a living for themselves and cannot withstand the financial changes brought about by the overtime rule; the second, that a real estate professional’s schedule rarely abides by regular workday hours and our true business hours often don’t begin until after five o’clock. This means that if not salaried, real estate professionals will be forced to compensate their workers with an incredible amount of overtime pay. Considering how harmful this would be to a large, established company, I urge you to reflect on its potential effects on small businesses.

Whichever way you choose to view it, small businesses come out losing. This would truly be a shame because these companies often struggle the most and could best benefit from aid not detriment. Small businesses have been contributing incredible growth to our country’s economy, even hitting the SBA’s annual lending authority threshold of $18.75 billion in July, two whole months before the end of the fiscal year in September. The potential success of these enterprises is immense and they would certainly provide much needed revitalization to our economy. This possibility would undoubtedly be squandered by the new proposed overtime rule and it is our responsibility to plead with you to prevent this.

While protecting hardworking Americans and ensuring that they receive competitive compensation for their honest work, it seems that the Department of Labor (DOL) is losing sight of the wellbeing of small businesses. We at NAWRB urge you to reconsider this proposed rule; if not, you will be benefiting one group of disadvantaged Americans while hurting another.

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