SBA Advocacy Submits Comments on Min Wage Rule

July 30, 2014

AA017956Last week, the U.S. Small Business Administration (SBA) Office of Advocacy submitted comments to the Wage and Hour Division of the U.S. Department of Labor (DOL) regarding its proposed rule, Establishing a Minimum Wage for Federal Contractors. The proposed rule implements Executive Order (E.O.) 13658, signed by President Barack Obama on Feb. 12, 2014, to increase the hourly minimum wage for federal contractors, subcontractors and their workers to $10.10 per hour, beginning January 1, 2015.

According to Advocacy, the DOL’s Initial Regulatory Flexibility Analysis (IRFA) reported that there are over 300,000 small, federal contractors who may be impacted by this rule. Subsequently, Advocacy has taken part in hosting listening sessions on E.O. 13658 with DOL officials, small businesses, and small-business representatives. Based on feedback from those conversations, Advocacy detailed the following issues in their comment letter:

  1. DOL should clarify the types of workers covered by this regulation.
  2. DOL’s IRFA does not consider key small-business industries in its analysis.
  3. DOL’s IRFA underestimates small-business compliance costs
  4. DOL must consider significant regulatory alternatives.

For these reasons, Advocacy is concerned that this rule will result in unintended consequences of high costs and possible closures for small businesses. Advocacy strongly recommends that DOL republish for public comment a Supplemental IRFA reanalyzing the numbers of small businesses affected and compliance costs before proceeding with this rulemaking. In addition, they suggest that DOL should also adopt any recommended small-business alternatives that may minimize the economic impact of this rulemaking.

NSBA staff and volunteers, including NSBA Trustee Mike Mitternight, president of Factory Service Agency, Inc. in Metairie, La., have provided commentary to Advocacy on minimum wage and other pending overtime rules. The comment period for this rule ended on Monday, July 28, 2014. Additional information on the rule can be accessed at the Federal Register website. DOL will review the comments submitted and issue a Final Rule by Oct. 1, 2014. NSBA will continue to monitor this rule and provide updates accordingly.

To read the Advocacy Comments, click here.