Episode 17 – Federal Policy Update

Welcome to the TRSA podcast. Providing interviews and insights from the linen, uniform, and facility services industry. Most Americans might not realize it, but they benefit at least once per week from the cleanliness and safety of laundered, reusable linens, uniforms, towels, mats and other products provided by various businesses and organizations. TRSA represents the companies that supply, launder, and maintain linens and uniforms. And in this podcast, we will bring the thought leaders of the industry to you.

 

Thanks for tuning in once more to the Linen Uniform and Facility Services podcast, interviews and insights by TRSA, sponsored by 6 Disciplines Consulting Services. I’m Jason Risley. And on today’s episode, we’ll take a look at TRSA’s government relations strategy on a federal level. And here, TRSA’s vice president of government relations and certifications, Kevin Schwab, and TRSA’s federal legislative council, Bill Spencer, run down 3 key pieces of federal legislation and regulations impacting businesses in the industry. If you want to hear the full presentation, which aired live on May 9th as part of TRSA’s monthly webinar series, visit TRSA’s on demand learning website, which is free to TRSA members.

 

You can access this area online at www.trsa.org/ondemand. The full version features updates on several state issues from California, Indiana, New York, and Texas, as well as the federal issues you’ll hear on today’s podcast. I’m so honored to represent the TRSA employers and employees around the country. And in fact, I was at a dinner last night with senator Ron Johnson and his chief of staff, and they couldn’t say enough kind things and great things about the PRSA membership and all that you do. So just real quick, I wanted to, let you know that the, TRSA PAC, political action committee, is very important.

 

So if you are not involved with that, you should be involved with that. We can get you information on that and that allows us to get involved with all kinds of campaigns around the country and make sure that the right people are put in to the elected positions that we need to put our issues forward and that’s democrats and republicans. And, also, I wanna let you know that July 10th 11th, we’re having a fly in for people to come into town. If you’d like to, we’d love to have you come in. We meet with about 3 or 4 very high level political people and, members of congress and people and agencies.

 

So I just wanted to throw that out there too. So right right now, I wanted to get into the joint employer. So the joint employer, I know you all are involved with this and these regulations have not changed since 1950 58. But luckily, the new secretary of labor, Acosta, and we actually went and met with him on our last fly in and he sat down with us for, like, 2 hours. And so that’s the type of thing that, you know, is so great about coming to Washington DC because we had to almost say, okay.

 

We have to go to our next meeting now. But he just wanted to talk to us forever because we’re so important in the employment and industry in the whole country. And so right now, the DOL, Department of Labor, has put in 4 different factors that will make sure that the joint employer is done properly. And that is higher fire, the employee supervise and control the employee’s work schedule or conditions of employment, determine the employee’s rate and method of payment, and maintain the employee’s employment records. Now the other thing I wanna just point out is that businesses must be mindful of 2 issues regarding this.

 

Even though they are gonna put this regulation out and we have submitted comments, and if you’d like to submit comments, you still can by June 10th. But the, DOL regulations are generally entitled to significant deference in the states. So for instance, state law may impose joint employer standards that are different from and sometimes broader than the test the DOL is proposing for the FLSA, Fair Labor Standards Act. And if you’re in California, for example, the definition of employ is in no sense based on federal law. And the California Labor Law companies who use workers from staffing agencies are jointly liable with the staffing agency for the payment of those workers’ wages.

 

So we’re working hard to get this, regulation put into place, but also we need to keep looking at the, state laws also. Now the second issue I wanna get into Hold on just a Bill Bill, just a just a just a quick second. Yeah. The reason I the reason this is so important and why we’ve been so involved with this for the last several years is under the Obama administration, they’ve tried to change the definition of joint employer. And what they would have done is any of our laundries that service large campuses, you know, multiple hotels in one location, large, large hospitals, and you place one of your employees at those locations where you deliver and you help them determine what linens go where, what garments go where, how to store them all, and, you know, what floor they need to go to.

 

That could be considered management over those employees, therefore, making you liable as a joint employer of that location. And just to give you an idea of what could happen is if there was any type of OSHA violations at, say, a hotel, then you as a joint employer would be liable under that enforcement action. So that’s why it’s important for us to have these definitions installed as what a joint employer is. And that’s that’s the importance of that. So, Bill, we’ll go ahead and we’ll go to the next issue.

 

Now for a brief message. I’m here today with Eric Kurgan of 6 Disciplines Consulting Services. We’re talking a bit about leadership development. To kick things off, why is leadership development such a hot topic? Well, research has shown us that an organization’s ability to hit its goals are directly tied to the performance of its people.

 

That shouldn’t come as a big surprise. But if we don’t have well trained, well connected, and committed people, then hitting our goals are virtually impossible. So we need to have structure to help people build skill. And in a tight labor market, where do those leaders come from? They really come from inside the organization.

 

So we need to have that skill set. We need to have those capabilities underway and being built within the organization. So when that need arises, I can call on a pool of team members within the organization that might fit that need. And it goes beyond that. It’s not just a matter of, saying, hey, we’ve got some people on deck who can move into roles, although important.

 

It’s also the people who are in their current roles because those skills really need to be developed and honed. And, unfortunately, the observation has been that there’s an expectation of performance when you’re in a given role. So So if you have the title of manager, somehow we have this expectation that you should act and perform as a manager, whatever that definition may be in that organization, but that expectation is there. So there are many situations where those individuals haven’t been given great clarity in what the role is, and they certainly haven’t been given great training to help them be successful in that role, and there isn’t any ongoing coaching. So if you look at all those factors, you really need some form of leadership development in an organization in order for that organization to hit its goals, and that’s why it’s a hot topic.

 

And where does the need exist in client organizations you’ve been working with? Interestingly, at all levels. You know, we tend to think about individuals and organizations maybe just at the top level, the the GM or the director of a given role or the leader of the operations side of the business or the leader of the services side of the business. This is where we tend to think. What we don’t think about are those folks who have leadership roles below that and even the layer below that.

 

So we have regional managers or district managers or branch managers, and then we might even have supervisory roles in the organization. And what I have found is that there’s very little emphasis placed on those next layer leaders. So emphasis is placed at the top layer, and they hire the most well connected. So they’re having conversations amongst themselves as as team members, with the CEO or president of the organization. So they’re well connected.

 

However, that connection begins to fray the further we go down in the organization. So the messages become less clear, the objectives become less clear, the methods that we want to be employed in the organization become less clear. And so we start to see that those people who are responsible for very important parts of the business just aren’t getting trained and aren’t getting the things that they need in order to be successful in that role. So if you go back to what we originally talked about at the beginning of this is if you don’t have good people in your organization doing the things you need them to do, it’s awfully difficult to hit those goals. Why do organizations seem to be hesitant to get their leaders trained?

 

Well, interesting piece for that is that organizations tend to think about training as a checkbox. So at the beginning of the year, we make a decision that Jason, as the leader of a given area in the company, needs to attend a training session so we can mark off that he actually worked on some development function or subdevelopment area in his job. And that checkbox concept just really doesn’t go very far because we don’t get them to the level that we need to get them to. We don’t get them trained to the the level that we need to get them to. There just isn’t much emphasis placed on training, and if it’s just a check box and we complete the check box, that that might be considered good, but it certainly doesn’t, carry forward and produce a result that we would like.

 

The second piece of this is it’s often the first item that gets cut or postponed in financially challenging times or in times where we’re just plain time constrained. So it’s very easy to say, well, we’ll postpone that. We won’t send Jason on this particular, training session or to this particular training session on this particular date because, financially, we don’t wanna do that, or we think we’re too busy to train Jason, so we can’t even check the box. So, unfortunately, it seems to be an area where we just don’t invest heavily enough in organizations to get people ready for the job that they’re in or prepare them for their future job. Why is this course different than other courses that are offered?

 

Well, there’s several factors here. One is that it includes all the layers in the organization, even potentially those who don’t have a direct report today. So that’s that’s very different. As I mentioned earlier, it’s very common to send somebody to that course, and that individual might be at a, more senior level or you’ve picked one person in the organization to go build some skills because you think that maybe they have a future, role in the organization, so you’re trying to build some skill around that. But in this particular case, we’re trying to train all the layers in the organization.

 

The second piece is it’s local. So what we do is we bring the facilitator, the trainer to your facility or a facility outside of your your location, but they’re in your town so that we can get more people to participate in the in the session as opposed to having to fly them to a destination and pay for all that travel, pay for the airfare, and all the other pieces associated with it. The facilitator comes to you. The 3rd piece is that it really becomes a team building event. So the titles are checked at the door.

 

So you’ve got individuals from supervisory roles at the Wash IO level to the senior leaders in the organization all sitting in the same course. And, we do a really good job of splitting up people so that they are not gathered up by their usual groups so that they gain the opportunity to work with someone who they don’t normally don’t work with. And, this structure also helps develop a culture of openness and improve communication. We’ve seen some really dynamic changes in organizations in terms of having conversations that typically wouldn’t be held or have never been held. And so people have given the opportunity or given the opportunity to be very open and honest about, their observations and, how people behave, how people perform, how, the organization reacts to those, pieces.

 

So the results have been very, very exciting and promising for organizations who go through this. Can you describe what the training course looks like? Well, the first course there’s multiple courses, but the first course is referred to as self leadership, and, the self leadership course really covers, 10 lessons in small hands on group exercises. So we break the participants in the session into small 4 to 6 person tables, and this gives them a chance to work on given exercises together, which, again, builds, camaraderie and, allows them to build some skills. And though in those ten lessons, they begin to learn about openness and honesty, integrity and trustworthiness, emotional intelligence, what does it mean to be a customer focused organization, being agile in action, building an individual plan that you can manage, and then, overall, what’s the self development, outcome that you wish to have at the end of this particular event?

 

So we work diligently to help those individuals gain, expertise or build some skills in in those various areas. The third element of it is that there are 3 assessments that are conducted, 2 of which are prior, one during the workshop, to give some more insight to that individual about their behavior, how they perform, and how they’re perceived their their perceived performance. So we conduct something called a multi rater 360 survey, and that’s con conducted and completed by their peers, by their direct reports if they have direct reports, and or by their leader or manager. We also have them conduct or complete rather a DISC behavioral assessment. This gives them an insight as to what their particular behavioral style is and then also allows them to gain some insight as to others’ styles, which improves communication.

 

So when they learn how given individuals in the organization what their preferred behavior or preferred style is, it gives them a chance to adapt to their style so they can communicate at a better level. And the 3rd piece is something known as emotional intelligence. And, this assessment takes a look at that individual’s emotional intelligence or EQ, and gives us a chance to, work on another area of their behavior and, help them perform, help them communicate, and help them interact with their colleagues in a much better way. And how do those individual assessments add value after the course? Well, because, it is a an an assessment that they have in their hands at the end of the the workshop, they can go back and study that assessment for 1, and see how, their behaviors or their given actions are perceived.

 

And one of the things that’s a key outcome of this course is that we have them identify what are they going to work on as a result of this course. So what area could they improve upon? Is that an area where we want them to, have more patients? Is that an area where we want them to, be a better listener? Do is it an area where people perceive them as being, unengaged and and disinterested?

 

Whatever those perceptions might be, it may be an area for them to define and identify the steps that they need to take in order to, improve their performance and improve the way they they act. And, the the assessments can be used as a way to help identify individual blind spots. And so it’s a very good tool, not only for the course and the workshop, but also after the workshop. Thanks again for joining us today, Eric. Hey.

 

Thank you, Jason. Appreciate it. Now back to the episode. Thank you. So let’s go over to the white collar overtime exemption, and this is another proposed rule making and this one’s gonna come out even sooner than the joint employers.

 

And basically, this is gonna increase the salary basis threshold to $679 per week or $35,308 per year. And then also the salary basis threshold for highly compensated employees would increase from 100,000 to a 140,000 $147,414 per year. And then the duties test for executive, administrative, and professional employees remain unchanged. Now the other thing that we wanna keep in mind is that the, rule may not require adjustments for employers operating in jurisdictions with higher minimum salary thresholds imposed imposed by state law. For example, let’s go to New York.

 

The New York employer cannot treat an employee as exempt from the overtime provisions of New York labor law unless the employee meets applicable duties test and paid between $832 or $1,125 per week depending on size of employer and location. And then another example in California, California employers must ensure employees perform exempt duties and are paid a salary basis between $45,760, and that’s at 25 employees or less company, and $49,920 for 26 employees or more. Now I know it’s, I’m throwing a lot of numbers around to you, but just wanted to let you know that, we’re working hard on this for you guys, and we hope that it’s gonna make your companies more profitable and, help you in the long run. Now the last issue I wanna just, throw out there is infrastructure. And as Kevin knows, my favorite thing to say to everybody on the hill and the agencies is that PRSA has the 3rd largest private road crew on the highways behind UPS and FedEx.

 

And people love that when they I tell them that we have more trucks on the road than anybody except for UPS and FedEx. The infrastructure is very important for us and TRSA has said we are supporting a 20¢, gas tax increase. And I know nobody wants to pay more money but, you know, in the long run, this helps everybody because if the roads are nicer and more manageable for your trucks to get around, then in the long run, that’s gonna be profitable for you even though you have to pay more in the gas tax. But right now, it’s a mess. I’ll tell you.

 

I actually talked this morning with, secretary Chao and Anthony Bedell, who is the assistant secretary for infrastructure at the Department of Transportation. They don’t even know what’s gonna happen because we you saw that Trump was over with Pelosi and minority leader Schumer. The White House, they said that they will put $2,000,000,000,000 2,000,000,000,000 dollars in the infrastructure plan, but now how do we pay for that? That’s gonna improve US roads, bridges, waterways, and broadband. But the Republicans are saying, well, we we just don’t have the money to do that, so how do we do that?

 

And the democrats want to take everything out of the federal government for the whole $2,000,000,000,000. So right now, it’s a crapshoot. You know, we’re we’re gonna work on it. We’re gonna try and get what we can and make sure that everything is done properly, but we just don’t know what’s gonna happen. They’re gonna have another meeting in a couple of weeks, and we’ll see if they have some more plans that come out.

 

But right now, we are just working hard for you guys to figure out how we’re gonna do the infrastructure plan and how we’re gonna pay for it. Thank you very much. And one thing I wanna talk about over the last two slides and two issues that Bill discussed with the overtime and the infrastructure. You’ve noticed that we’re out and supporting an increase in the overtime salary and an actual increase in the gas tax. For the last several years well, I’ve I’ve been working at t r s a for 10.

 

So the last 9 and at 9 years, we’ve always gone to folks saying, don’t add anything to us. We’re not gonna increase anything. Don’t pay for anything. Don’t do anything. And as we have evolved, we’ve realized that at at some point, we have to come to the table.

 

We have to be able to present some ideas, and we feel that supporting the modest increase in the overtime exemption rule and this modest gas tax increase that we are coming to the table. People are willing to listen to us because we are coming with ideas. And it’s more of an evolution of thought of how we can get things done. And like Bill said, you know, there needs to be an investment in the infrastructure because the cost keeping up your fleet on bad roads is a lot more expensive than paying paying an increase in in the fuel tax. If there’s something that you would like to see changed, whether it’s at the federal, state, or at the city level, contact us.

 

We cannot help the industry if we don’t know about it, and we don’t know about everything. We know about a lot, but not everything. So please contact us with any issues that you may have. It gives us, you know, gives us an opportunity to go out and help the industry as a whole. A strong united message on government policy issues is important in order to have a voice in Washington DC and in state capitals across the United States.

 

This helps policy makers enact legislation that is not overly burdensome or potentially harmful to the linen uniform and services industry. TRSAs political action committee or TRSAPAC helps the industry present a united front on important legislative and regulatory issues at both the federal and state levels. For more information on contributing to the TRSA pack, contact TRSA’s vice president of government relations and certifications, Kevin Schwab, atkschwalb@trsa.org. That’s kschwalb@trsa.org. We’ll be back 2 weeks from now with another episode of the Linen Uniform and Facility Services podcast sponsored by 6 Disciplines Consulting Services.

 

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