Long-Awaited Overtime Rule is Issued; Opponents Weigh In

If you’re in or around the world of HR, you’ve been awaiting the details of the new overtime rule within the Fair Labor Standards Act (FLSA) — effective Dec. 1. This was done at the behest of President Obama, and executed by the Secretary of Labor. According to the U.S. Department of Labor, the new rule will:

  • Raise the salary threshold indicating eligibility from $455/week to $913 ($47,476 per year), ensuring protections to 4.2 million workers
  • Automatically update the salary threshold every three years, based on wage growth over time, increasing predictability
  • Strengthen overtime protections for salaried workers already entitled to overtime
  • Provide greater clarity for workers and employers

Here’s a video of Secretary Tom Perez explaining and advocating for the new rule:

Let it be known that not all are so enthusiastic, however. Opponents – a list that includes us at the Indiana Chamber, the U.S. Chamber, Society for Human Resource Management, many legislators and policy institutes  assert the new rule is unreasonable for several reasons, including the fact that some employees will lose their coveted professional exempt status.

UPDATE: Here’s more information from the U.S. Chamber on why this measure is so onerous. 

A Big Jump in the Minimum Wage: Will It Help or Hurt Low-Skilled Workers?

Reason.TV’s Nick Gillespie sat down with George Mason University economist Don Boudreaux to discuss raising the minimum wage and its impact on not just businesses, but workers.

Some states and cities have moved to increase their minimum wage to $15, and results have yet to be determined. Boudreaux is adamantly against the increase, however, and expects many workers will lose not only their jobs, but opportunities to gain skills to move up the economic ladder.

May 18 Webinar: FREE for Indiana Chamber Members

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Did you know over 75% of Americans are living paycheck to paycheck? Your employees are likely dealing with financial stresses in one of the following areas:

  • Retirement
  • Health care
  • Student loans
  • Emergency savings

And if they’re stressed, it’s likely their productivity at work is suffering.

But you can help them. Our friend, financial expert Pete the Planner, will tell you how during our FREE webinar for Indiana Chamber members on Wednesday, May 18 at 10 a.m. (EDT).

Register for the FREE webinar now, and dial in on May 18 to receive this Indiana Chamber membership benefit!

Purdue’s Income Share Agreement Option Moves Forward

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In the latest BizVoice, we covered Purdue University’s recent exploration into the world of Income Share Agreements (ISAs). The funding strategy allows students to pay back loans based on their future earnings. It’s a way to mitigate the mountains of debt today’s college students often find themselves in after graduation.

Since the article’s release, Purdue has moved forward to the next phase of the process. Purdue Research Foundation (PRF) is managing and making the funding available for the program. This web site provides more information.

PRF is now focused on providing educational and informational sessions to students and parents. The application process for the Back a Boiler – ISA Fund will begin in May. PRF anticipates this will give students time to review all of their options and determine which best serves their educational funding needs.

Corporate Tax Reform Would Benefit Nation, Workers

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Lawmakers and candidates on all sides of the political spectrum acknowledge reforming America’s corporate tax rate is overdue. President Obama has even suggested reducing the rate from 35% to 28%. Writing for Reason, Veronique de Rugy of the Mercatus Center sums up the necessity for this, concluding it’s an optimal way to benefit both businesses and the workforce:

Even such high-tax nations as France have lower rates. However, the real competition comes from Canada (26.1 percent), Denmark (25 percent), the United Kingdom (20 percent) and the many countries, such as Ireland (12.5 percent), with rates below 20 percent. Moreover, competition is intensifying. Last June, the U.K. announced that it would cut its rate from 20 percent to 18 percent in the next five years. It’s now saying that it will lower the rate even further, to 17 percent. These reductions are the final stage of drastic cuts implemented since 2007, when the country’s companies faced a 30 percent tax rate. That’s a second wave of reduction since the rate was as high as 54 percent in the 1980s.

Now contrast this with the United States. In the 1980s, policymakers responded to the pressure put on by many countries lowering their corporate rates by decreasing America’s rate from 49.7 percent to 33 percent. However, since then, the U.S. has fallen asleep on the switch (and even raised the rate by 1 percentage point in the 1990s) and is now widely out of sync with internal competition. In 2015, the average corporate rate for countries in the Organisation for Economic Co-operation and Development was 25 percent, down from 48 percent in the early 1980s.

As if that were not enough competition for American companies, the U.S. government burdens them with another layer by taxing them on a worldwide basis. In that system, income from American companies is subject to U.S. taxes whether it’s earned in Seattle, Paris or Singapore. By contrast, most wealthy countries don’t tax foreign business income; about half of OECD nations have “territorial” systems that tax firms only on domestic income. In other words, U.S. exporters face a much less competitive tax system than most of their biggest competitors…

Not everyone would like to reduce taxes on corporations, but everyone should. The data show that most of the corporate tax burden is actually shifted to workers, who end up shouldering the tax in the form of lower wages. With the U.K. taking further measures to reduce its burden on corporations, boosting its workers’ wages and inflicting yet another blow to U.S. competitiveness, Congress should do what’s right by reforming the corporate tax. It may be the one bipartisan issue out there. All we need is leadership.

VIDEO: See What’s in the New Edition of BizVoice

Our Senior VP and editor of BizVoice Tom Schuman explains what’s in the March/April edition. If you’re interested in higher education, corporate social responsibility or Vanderburgh County, we have information you can’t miss.

This issue also focuses on the “Outstanding Talent” driver of the Indiana Chamber’s Indiana Vision 2025 plan.

Read BizVoice online today.

Cook: Governors’ Races Unique, More Difficult to Handicap than Federal Races

Cook_CharlieCharlie Cook is editor and publisher of the Cook Political Report and a political analyst for National Journal magazine. Cook is considered one of the nation’s leading authorities on American politics, and The New York Times has called him “one of the best political handicappers in the nation.”

Cook will be the keynote speaker at the Indiana Chamber’s 2016 Legislative Dinner on February 9. (Get your tickets now!) I recently spoke with Cook for an evaluation of this very turbulent time in American politics.

Below is my final question (see his other responses about political surprises, Donald Trump and Bernie Sanders, and America’s infatuation with presidential politics) :

Indiana is already gearing up for the 2016 gubernatorial race – a rematch from 2012. Gov. Pence has been under heat on some social issues, and lately for the state’s stance on accepting refugees. John Gregg’s supporters have seen these as benefits to their chances. What do you expect in this race, and do you think Pence could be vulnerable?

Cook: I tend to delegate governors’ races to our senior editor Jennifer Duffy, so I’m not doing deep dives into these races. But I’ll say that Indiana went through a period where Democrats were very competitive and did well – like Evan Bayh, and Obama carried it in 2008.

But in 2012, Indiana wasn’t even in the top 10 to 12 competitive races presidentially. While governors’ races tend to be more independent of national politics and less straight party than Senate and House races, I think Indiana has reverted more to type and back into the pretty Republican column. It doesn’t mean a Republican governor is unbeatable and a race can get relatively close, but for a Democrat to get over the finish line, that’s awfully hard in Indiana.

It’s one thing to cover Senate and House races from Washington, but governors’ races have their own unique sets of issues and rhythms, so it’s hard for anyone from out of state to understand it.

Cook: Politics Full of Surprises, but Obama Win Remains Most Shocking

Cook_CharlieCharlie Cook is editor and publisher of the Cook Political Report and a political analyst for National Journal magazine. Cook is considered one of the nation’s leading authorities on American politics, and The New York Times has called him “one of the best political handicappers in the nation.”

Cook will be the keynote speaker at the Indiana Chamber’s 2016 Legislative Dinner on February 9. (Get your tickets now!) I recently spoke with Cook for an evaluation of this very turbulent time in American politics. Here is an excerpt from the conversation.

In 2014, the GOP had a major shake-up when Eric Cantor, a member of leadership, was unseated in the primary. In Indiana, we had a similar shock in 2012 when Richard Lugar was ousted. What are some ongoing lessons for long-standing legislators to take from that? Is that mostly a GOP predicament due to its Tea Party elements, or are do you see any Democrats potentially dealing with primary turbulence in the near future?

Cook: Washington and Congress have never been beloved, and alienation is increasing. But it shows you have to be back in your state and your district, and really keep a tight feel on the pulse back home because it can get out from under you. Cantor was a bright, effective member, but he went on the national stage and became a major force in the national Republican Party. But to do that meant not going home and keeping fences mended as well as he should have.

Sen. Lugar had become this enormously respected figure in terms of international politics and the world scene, and a real statesman. But that came at a cost. And not having a home back in the state became symbolic of something.

So yes, there’s a “Tea Party versus The Establishment” dynamic in the Republican Party, but there’s an older dynamic of “going national” and maybe not tending to things back home quite as attentively as you have to in an era when people are so suspicious of politicians. But there’s certainly more volatility and anger within the GOP right now than there is in the Democratic Party. Although Sanders and the Occupy Wall Street movement shows it does exist in the Democratic Party, it’s more profound in the GOP. We’re not seeing Democratic incumbents knocked off in the primaries at the regularity we see in the GOP.

What shocked you as far as the most surprising election result you’ve seen in the past 20 years?

Cook: I think Obama beating Clinton. There were signs early on that he had a unique appeal with younger voters … but to have someone who had just barely been a member Congress upset one of the biggest names in the Democratic Party, it was one of the biggest shocks I’d ever seen.

In some ways, freshman senators Marco Rubio and Ted Cruz – although philosophically they’re very different from where Obama was – (remind me of that) but the idea of a first-term senator doing that well was unprecedented. It showed you that a lot of the old rules may not be applying.