Public Comment 59157

RIN 1235-AA20
March 27, 2019
Ms. Melissa Smith
Director of the Division of Regulations, Legislation, and Interpretation
Wage and Hour Division
U.S. Department of Labor
Room S–3502, 200 Constitution Avenue NW
Washington, DC 20210
Re:

Notice of Proposed Rulemaking; Defining and Delimiting the Exemption for Executive,
Administrative, Professional, Outside Sales, and Computer Employees
Docket No. WHD-2019-0001-0001

Dear Ms. Ziegler:

I am the President and CEO of a professional placement firm in Nashville, TN. We employ

about 55 full-time people. We are a member of the National Association of Professional Services.
I am writing to comment on the above-referenced proposed regulation to change the overtime
requirements under the Fair Labor Standards Act (FLSA). Being in the professional placement
business, I am uniquely qualified to weigh in on several different types of business. I am
specifically concerned how the increase to the salary threshold will impact professional sales
employees, nonprofit employers, small businesses, and employers in lower cost of living and rural
areas of the country. This proposed increase will place a substantial financial burden upon many
businesses, including my own, by increasing both salary and operational expenses with no return
on investment (ROI). These additional costs, if enacted in the current form, would likely be borne

directly by my employees in the form of lower commission compensation, which would be the
opposite of the intended effect. The proposed rule change would have a significant impact on my
company and our professional recruiters, thus I strongly urge the Department of Labor to consider
the enclosed comments, below, and reconsider the proposed changes accordingly.

The DOL’s proposed rule increases the minimum salary to qualify as an exempt employee
from $455 ($23,660 annually) per week to $679 ($35,308 annually) per week in 2020. Adjusting
for inflation, the $455 weekly threshold set in 2004, would have only risen to $606 weekly ($31,513
annually). This increase, in addition to being larger than is easily justifiable, does not fully account
for commission, incentives, bonuses, benefits (such as health care, short term and long term
disability, etc.), flexibility and the professional status that our employees receive. At the very
least, the full dollar value of the nondiscretionary commissions, incentives, and bonuses
should be included in full instead of it only being able to count for 10% of the total. If the
full value of these payments are excluded from the calculation, then we have several options,
none of which are appealing.
If we were to revert our employees to an hourly rate, they would lose the additional benefits
and flexibility that arise from being a professional; some are single parents, most are primary
income earners, some even work virtually. Several of our best professional recruiters need

autonomy and flexible work arrangements. These are college-educated, degreed, and in most
cases, certified professionals who are responsible for their work and take it seriously. They do
not need daily monitoring or hand-holding to do their jobs. It would also lead to elimination of
work schedule flexibility that many of our employees cherish for positive work-life balance. With
the implementation of the new rules, many of our professional employees (who were previously
deemed exempt) will be unable to maintain that flexibility. In order to be paid for 40 hours per
week, they must now be working 40 hours per week, whereas in the past, they were able to
accommodate their personal and professional lives and make the hours work on an annual basis
whenever they needed to as long as they produced.

The search profession is pay-for-

performance, results oriented business. There is negligible income to the firm unless a placement
is consummated, no matter how many hours a recruiter puts into a search.
The backlash from our employees when the previous proposed change was announced
and our pay recalibration was presented, in 2016, was fast and furious. This time, I am afraid
some of them will likely go to work for another employer who may or may not abide by the new
rules. Some businesses take a responsibility to uphold the law very seriously, whereas some do
not. Unfortunately, these new rules will only punish those employers who are willing to abide by
the rules.

Further, this would create a challenge by placing a burden on the employers to
exaustively track these newly nonexempt employees’ hours to ensure compliance with overtime
pay and other requirements. This tracking of hours would also produce increased human
resources paperwork and technology costs to our company. In terms of the compliance burden
of the proposed rule, the department has completely underestimated the time and resources it
would take for our company and other businesses to understand and comply with the changes.
The DOL's estimate that it would take companies only one hour to read and familiarize
themselves with the rule, one hour per employee to adjust their status, and five additional
minutes per week to schedule and monitor each impacted employee is inconsistent with the
reality of our, and most other businesses. The magnitude of the changes made by the proposed
rule are substantial, and if left unchanged, would result in significant time and expense to ensure
that we are in compliance on an annual basis. This increased, ongoing overhead expense
further erodes the money available to pay all or our professional recruiters.
It is absolutely not the government's role to define who is and who is not a "manager" or
“professional” in the US economy by using an arbitrary salary threshold. That is a decision best
made collectively by and between the business owners, executives, and employees. The

proposed overtime rules affect not only employment, but the relationship between workers and
employers.

Many companies are located in rural and small towns outside of metropolitan areas and
in certain lower-wage regions of the country. Setting one uniform minimum salary level for the
nation disregards these differing regional salary levels. I would ask the DOL to consider the
differing regional salary levels when issuing the final rule. Practically, it not possible to design
"one size fits all" regulations for large sectors of the American economy without a myriad of
negative, unintended consequences or regulatory excess.

These proposals are completely counter-productive to a competitive, thriving economic
engine that creates good, sustainable jobs for American citizens. Federal regulations that
attempt to regulate small businesses in a complex and fast changing modern economy are
unhealthy and over time harm the economy. Exceptions and exclusions to a rule must be
constantly added and removed to keep up with the economic realities of the day. Old job
activities fade. New job titles and functions are created constantly. Some are more susceptible
to economic pressures and regulatory burden than others. Jobs that were primarily
"management" or “professional” yesterday, become commoditized and are best performed by
"blue collar" today. Over time, the regulatory burden of this proposed rule will increase and

smother this economy with regulations that don't fit and don't make sense ... having the exact
opposite outcome of the original intention. There are a thousand "exceptions" to the proposed
rule. So, the prudent solution is to eliminate this proposed rule change altogether or keep the
salary and compensation threshold at or below the "poverty level" to ensure it is NEVER a
burden to small businesses, the documented job engines of our economy, but still remains a
minimal protection for citizens from exploitative businesses.
Please consider Inside Sales Professionals for inclusion in the exemption that is
currently only for outside sales roles. With advances in mobile computing, mobile networks
and the rise in remote or virtual employees working from their home (or anywhere that has a
stable internet connection), while providing service to customers worldwide, the need for
employees to work when able and where they choose has never been greater. These
individuals often carry sales quotas, in some instances, identical to outside sales roles of
yesterday that are provided with the exemption. Today there is a collision between
management and office (whether commercial or home) based sales reps as they battle to reach
sales results and service customers but within a 40-hour work week. Please consider this
growing industry for exemption.