U.S. Department of Labor Overtime Rule Will Hurt Businesses

7768406In 2014, President Obama directed the U.S. Department of Labor (DOL) to update and modernize rules regulating exemption of certain employees from minimum wage and overtime protection provisions of the Fair Labor Standards Act. Just a few weeks ago, the U.S. DOL released regulations regarding new rules for overtime. This action drastically increases the salary threshold under which most employees would be eligible for overtime pay, from $23,660 for a full-time employee to $47,476 per year. This will affect millions of middle-wage employers across the country.

In addition to this increase in salary threshold, an automatic adjustment will occur every three years. Also, the “duties test” that determines whether or not certain employees are eligible for overtime even if they make more than the new threshold amount will continue. To be eligible for this exemption, an employee’s job duties must primarily involve executive, administrative or professional duties as outlined by DOL regulations. The change is set to go into effect on December 1 of this year. (See DOL fact sheet.)

Obviously, this has drastic implications for the employer community. According to the Washington Post, about 35% of full-time salaried employees will be eligible for time and a half when they work extra hours under the new rule. Under an already existing rule, that number was 7%. As such, employers will have less flexibility in documenting time for their workers – including flex time – or may have to cut back hours for certain employees. This can hamper employers being able to reinvest in their companies, as well as provide better benefits and growth opportunities. Small businesses will be even more impacted by this onerous rule.

The Indiana Chamber, in conjunction with the U.S. Chamber, is reaching out to the Indiana delegation in Washington, D.C. to let them know how this will impact the business community. We encourage you to participate in this call to action.

The 2016 Indiana Wage and Hour Seminar on July 28 will include a detailed discussion on the impacts on employers.

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.

ESSA Passes Final Hurdles, Signed by Pres. Obama

36107229Last week, the Senate passed and President Obama signed into law the Every Student Succeeds Act (ESSA) – sweeping education legislation that replaces No Child Left Behind (NCLB). Most notably, this legislation sends significant power back to the states and local districts, while still maintaining some limited federal oversight over policies.

NCLB created a national system that judged schools based on math and reading scores, and had significant requirements to raise test scores every year or face significant penalties. ESSA, on the other hand, shifts power to the states and locals while providing flexibility. This legislation seeks to ensure that all children receive a high-quality education and close student achievement gaps.

Still, this legislation is not perfect by any means. We wish stronger accountability measures were included, but in the spirit of compromise and collaboration, it is a strong step forward in ensuring a balance between federal, state and local governments. It has an emphasis on challenging academic standards and accompanying assessments and accountability plans; it also institutes changes to funding for innovative programs – including Preschool Development Grants, a competitive one-year grant program to develop, update or implement a strategic plan that facilitates and improves coordination, quality and access for early childhood education, which will now be administered jointly by the U.S. Department of Health and U.S. Department of Education.

A special thank you to Congressmen Todd Rokita and Luke Messer for their tireless work on ESSA while sitting on the House Education and Workforce Committee.

Keystone XL Pipeline Defeat Will Likely Be Short-Lived

119744231The Keystone XL Pipeline bill was narrowly defeated Tuesday in the U.S. Senate. Indiana Chamber of Commerce President and CEO Kevin Brinegar offers his thoughts on the policy and the latest activity in Washington:

“Canada is going to continue to develop the oil sands and sell to other nations whether the U.S. allows the Keystone XL Pipeline or not. Whatever the impact that activity has on the environment, the activity is still going to happen. That’s the reality. Continued posturing by the Obama Administration and others amid calls from environmental groups isn’t going to change that.

Other countries are looking out for their energy futures. The U.S. needs to as well. Going forward with the Keystone XL Pipeline is an important part of the mix. It would strengthen and expand our already vital energy relationship with Canada. And sourcing more of our energy from a friendly, North American neighbor will help reduce our reliance on energy resources from less stable areas of the world.

Indiana is fortunate to have two senators – Dan Coats and Joe Donnelly – who understand the pipeline’s importance and have been staunch supporters of the project. It’s too bad the Senate, on the whole, couldn’t get past politics and do the right thing for our nation’s energy security. However, we look forward to early 2015 when this measure seems destined to finally pass the Senate and make its way to the President’s desk.

Background: The proposed Keystone XL project would construct a 1,700 mile pipeline to transport about 800,000 barrels a day of heavy crude oil from tar sand fields in Canada across the central U.S. to refineries on the Gulf Coast.

Poll: Almost One in Four Americans Open to Separating from U.S.

CAlthough Scotland’s movement to secede from the United Kingdom fell a bit short at the ballot box, it appears it’s not just 45% of Scots who have separation on their minds.

And frankly, it’s no secret most Americans aren’t enthusiastic about the federal government these days. Between gridlock, behemoth budgets and trying to solve the health care puzzle, many have grown frustrated. Poll results explained in this Reuters article, however, are still a bit alarming.

Whoever takes the White House in 2016 may have his/her hands full in trying to unify the country. 

New Book Portrays Gov. Daniels’ Role, Considerations in 2012 Presidential Election

Oh, don't we all just love political gossip? That's kind of rhetorical, because most of us do.

Disappointing as it was for many Hoosiers, then-Gov. Mitch Daniels opted not to run for president in 2012, despite the fact that many thought he had an excellent chance of defeating President Obama. However, a new book, "Double Down: Game Change 2012," elaborates on the role Daniels did play in the election. Excerpts from the Indianapolis Star report are below. (And Star columnist Matthew Tully reported on Twitter that HBO will be making a movie based on the book, and speculation has started on who will play Daniels. Feel free to list your preferences in the comments section!)

As was extensively reported at the time, Daniels’ wife and daughters had no interest in his running or becoming president, and he ultimately deferred to them.

The book provides new details of Daniels’ consideration of his own bid, and how he tried to recruit others to run to prevent the nomination from going to Mitt Romney.

The authors of the book describe Daniels as viewing Romney as a “preprogrammed automaton” with a “plutocratic demeanor.” Those he tried to recruit as an alternative included Fred Smith, the founder and head of FedEx, and former Senate Majority Leader Bill Frist, the book says.

Daniels also consulted with former Florida Gov. Jeb Bush and former Mississippi Gov. Haley Barbour as each tried to persuade one of the others to get in.

When Daniels went to Dallas for the 2011 Super Bowl, George W. Bush made a personal pitch, according to the book. In addition to saying that his fundraisers would likely back Daniels, Bush also addressed Daniels’ family concerns. Bush said, according to the book, that his wife and daughters hadn’t wanted him to run, but it worked out great for them.

Daniels also got encouragement from Bush operative Karl Rove and from 2008 GOP nominee John McCain, the book says. Others he expected would be in his camp included former Vice President Dick Cheney, former House Majority Leader Dick Armey, New Jersey Gov. Chris Christie and Wisconsin Gov. Scott Walker.

And Daniels got the attention of Democrats with a 2011 speech to a national gathering of conservative activists that urged the country to focus on the “red menace” of the national debt. Former President Bill Clinton publicly called Daniels one of the smart Republicans and told Daniels privately that he’d watched the speech more than once, the book says. Shown a copy of Daniels’ speech, President Barack Obama said it had a lot of “reasonableness” and that he would enjoy debating Daniels…

When Daniels told supporters later that month that he wasn’t running, his voice broke.

“Look guys, I know you don’t agree, and you’re disappointed, and I’ve let you down,” the book quotes Daniels saying in the conference call. “I love my country, but I love my family more.”…

In May, the book says, Daniels gave Romney a “kick in the shins” when he told Fox News that he wasn’t being vetted to be Romney’s running mate.

“Of course not,” Daniels said. “If I thought the call was coming, I would disconnect the phone.”

Caution Required in College Ratings Plan

Yes, the explanation gets a bit technical. But the point – although changes in the current system are needed, getting a valid set of measures in place is not going to be easy — is valid in this Brookings analysis of President Obama's announced college ratings plan. Current data gaps are only one part of the challenge.

The President’s plan, which he is touting on a two-day bus tour through New York and Pennsylvania, proposes that the Department of Education develop a new rating system that will judge colleges based on accessibility for low-income students, affordability, and outcomes, including employment and earnings.  The ratings will be developed over the next year and will ultimately be made available to students shopping for college on the White House’s College Scorecard.
 
There is clearly a need for more and better information on college quality. The current lack of transparency has created a highly dysfunctional market for higher education in which students can choose from a wide variety of institutions but often have access to better information about the amenities colleges offer than the quality of their academic programs.  Consequently, colleges compete on measures that factor into popular rankings such as average SAT scores and student-faculty ratios rather than quality and price.
 
Expanding the College Scorecard is a worthy strategy on its own, but President Obama has proposed to go a giant step further and eventually tie the availability of financial aid to the new ratings.  Students attending highly rated institutions would receive larger Pell grants and more generous terms for federal student loans. Institutions would receive a bonus grant based on the number of Pell-eligible students they enroll and graduate.  As a result, institutions would have an incentive to recruit and graduate more low-income students, and low-income students would have an incentive to attend higher quality institutions.
 
If the problem in the market for higher education is a lack of information, why does more information need to be accompanied by top-down accountability from Washington rather than the bottom-up, market-based accountability produced by the information itself?  Congressional Republicans have reacted to the president’s plan with fears of “price controls” and “standards set by Washington bureaucrats.”  But these objections miss an important point about higher education: because taxpayers are footing the bill for a significant fraction of the nation’s investment in higher education, we cannot rely entirely on consumers to incentivize institutions to operate efficiently, innovate, and generate good student outcomes.
 
But getting from a laudable set of principles to a workable set of policies is going to be hard work.  The first task is for the Obama administration to develop a set of measures of college quality that will ultimately be accurate enough to use for accountability purposes.  This is not possible with existing data, with notable shortcomings including the fact that graduation rates are only calculated for first-time, full-time freshmen (who comprise a small share of students at many institutions) and a federal law banning the government from connecting education and earnings data in order to examine graduates’ success in the labor market.  These problems are fixable, but will take significant effort and, absent a back door to earnings data, Congressional action.

Guest Blog: Reset Africa; Obama Tours the Continent

The following is a guest blog by Asoka Ranaweera, managing partner of Grid2Grid LLC, a company based in Washington, D.C. that advises investors on structuring investments and developing projects in West, East and Central Africa. Ranaweera penned this back in July, and was a source in our upcoming BizVoice story, "Africa Under Construction," set for release in the new edition next week.

I am sitting in a hotel in Dar es Salaam Tanzania. The town is buzzing with anticipation and excitement. Any day now, President Obama will touch down and thousands of Tanzanians will be out to greet him. Everywhere you go and almost everyone you speak to will have something positive to say about our President and Michelle Obama.

By some remarkable coincidence, President George W. Bush and Laura Bush are also in town. President Bush is on a regional tour, and is fondly remembered by many Africans for providing billions of dollars in funding for combating AIDS and for starting the Millennium Challenge Corporation (MCC), which has had a significant impact in countries like Tanzania.

As I ponder the countless hours of traffic jams, security roadblocks and searches to come, my attention wanders toward the hotel bar. I see a large group of Chinese businessmen and women enjoying a drink and chatting animatedly. Dar es Salaam is abuzz not just with Obama’s visit, but also by the sounds of an economy growing at an average of 7% per annum.

Wherever you might look in Tanzania, you will find Africans, Chinese, Indians, Malaysians and Arabs vying for a slice of Tanzania’s economic growth and business. Meanwhile, as I left Washington, D.C. for Dar es Salaam, President Obama was getting some flak for embarking on a weeklong tour of Africa at the expense of U.S. taxpayers.

Rather than thinking about Africa as a place where development is now taking place rapidly, many in the American press still view it from a 1980s perspective. Meanwhile, Brazil, Russia, India, China, Turkey and many other countries are increasingly seeing Africa as a land of opportunity, a place to trade, invest and to develop bilateral relations with African people.

Africa is where all the economic action is taking place these days with 15 of the 20 fastest growing economies and approximately 300 million people attaining middle-class status in the last 20 years, according to the African Development Bank (AFDB). It’s possible that in the years to come, Africa will overtake Asia to become the fastest growing region of the world.

In 2009, President Obama visited Africa for about 20 hours. His election at the time energized many Africans into believing that his Kenyan heritage would lead to greater cooperation between Americans and Africans. Unfortunately, that never panned out; President Obama and his administration had huge domestic challenges to overcome such as the global financial crisis, which we are all still recovering from.

As we entered the recession, many Americans realized that Africa — a continent long associated with starving children, conflict diamonds and corrupt dictators — was growing and that altogether a new dynamic was shaping it. And we also came to the understanding that countries such as China had come to have a profound impact on the continent and that Africa was now a destination for business, trade and investment. Thus after more than four years of being primarily absent from the scene directly, President Obama is finally back, and this time his advisors say it is with the intention to “reset relations with Africa."

Afrophiles hope that this could be the beginning of a more concerted and directed engagement with the continent, especially in light of the fact that many people both at home and in Africa believe that this belated engagement has its roots more in economic competition than anything else.

Interestingly enough, from my experience America is more welcomed and viewed in higher terms in Africa than in any other part of the world. Africans feel a strong affinity for all things American and have been yearning for our support and partnerships. Africans in this generation are more likely to ask for investment and trade projects to promote bilateral investment than that dreaded term, "aid." And so the dynamic today is so much more different than it was.

As I get ready to leave the hotel for a meeting downtown, I hear a few Tanzanians discussing what President Obama will be doing in the country. It turns out he will be visiting Symbion, a U.S. company that is playing a significant role in the power generation sector. I am relieved to hear we as American business people are doing something constructive with the Tanzanian people.

As I am being driven through the streets of downtown Dar es Salaam, we almost collide with a high speed convoy. And I am told that we just saw Sri Lankan President Mahinda Rajapakse on his way to the statehouse. It turns out this is the first official state visit to Africa by a Sri Lankan leader; times have really changed and I hope we hit that Africa relations reset button sooner rather than later.

NLRB Keeps Charging Ahead Blindly

In the regulatory mess that is Washington today, the leader of the ridiculous pack just might be the National Labor Relations Board.

With union membership continuing to decline to historically low levels, the NLRB has apparently determined it will do whatever it can to help slow the erosion. It has shown no pretense of fairness in its decisions over the past four years with its rulings also often having major impacts on non-union employers.

In January, a U.S. Court of Appeals threw out three of President Obama's NLRB appointees, raising questions about the legality of recent rulings. Those same people have now been renominated by the President, so the drama continues.

The latest partisan action regards union dues expenditures. The National Association of Manufacturers (NAM) provides this summary:

A case currently before the NLRB could significantly alter the current way in which employees can exercise their Beck rights to object  to union dues’ expenditures.  According to the U.S. Supreme Court, in the Beck decision, employees can object to a portion of union dues’ expenditures if the dues are being used to fund political activity not related to collective bargaining or contract administration.  In a recent case, the United Nurses and Allied Professionals (Kent Hospital) and Jeanette Geary, however, the NLRB decided an employee, who objected to the union’s expenditures, did not deserve to have any verification showing proof how the union was spending its funds.
 
The NLRB proposes to go a step further to give the unions the upper hand by presuming the union is, indeed, spending all the dues correctly.  The effect would be the Board is telling employees they have to prove the union is spending money on lobbying and political activity with no means of independently verifying the union claims.
 
The Board’s new idea would unfairly and unnecessarily stack the deck against employees who have to pay dues, but disagree with the union politically.  Under the proposal, any lobbying activity the union would engage in on Capitol Hill, down to state and local seats of government, would go unchecked.
 

 

Finding the Vote Digitally and Socially

Some social media platforms may come and go in popularity, but the overall impact is only going to continue to grow. Assessing that impact in the 2012 presidential election is an Indiana Chamber partner in BIPAC (Business Industry Political Action Committee), focused on electing pro-economy, pro-jobs members of Congres.

Romney may have captured voters over 30, but he still lost. Obama on the other hand captured the women's vote, minority vote and youth vote, giving him the edge he needed to win. Digital and social media is where he found these votes and it's what set him apart from Romney. It is where he fundraised more than 700 million dollars and activated mobs of volunteers. He was able to reach more than 5 million youth votes via Facebook. Michelle Obama connected with women on Pinterest and the Obama campaign reached scores of Hispanic voters through mobile.
 
With 31 million election tweets being sent on Election Day, this cycle was not only deemed "The Twitter Election," but it is being characterized as the first full digital election. Social media is a fundamental change in how our society communicates and for those with hopes of reaching voters, employees, Members of Congress and other stakeholders, your efforts need to be online as well as offline.