Some 5 million employees could be eligible for overtime pay, but retailers fear the costs would result in layoffs and cut hours for workers.
On the heels of the Obama Administration’s Supreme Court victory last week that saw healthcare subsidies upheld, the Administration proposed new overtime rules this week that would allow more employees the right to claim overtime pay.
“Right now, too many Americans are working long days for less pay than they deserve,” President Obama wrote in an op-ed blog for The Huffington Post. “That’s partly because we’ve failed to update overtime regulations for years.”
Currently, workers must earn less than $23,660 a year to be guaranteed overtime pay. The proposal would allow overtime pay for most salaried employees who earn up to $50,440 per year, giving them time and a half pay when they work more than 40 hours per week. The move, which was announced by the Labor Department, would make overtime pay accessible to more than 5 million workers, according to a report in The Huffington Post.
Industry associations and employers are speaking out against the proposal, saying such an overtime expansion would increase the costs of doing business and force them to reduce employee hours or even cut back on workers’ hours.
“Retailers are concerned that the new overtime rules will make it hard to develop and retain managers. We also think that the added cost will result in fewer managers and more part-time and hourly employees. Overall, it’s a bad deal for retailers and retail employees,” Neil Trautwein, vice president, health care policy, National Retail Federation (NRF) told Convenience Store Decisions.
Fox News pointed out that the proposed changes will be open for public comment and could take months to finalize, but can be enacted through regulation, without approval by the Republican-led Congress.
The threat of the regulation becoming effective is real, Trautwein confirmed. “There is a 60-day comment period, but this can go in effect without a Congressional vote. Retailers should worry about this becoming effective in 2016. NRF will comment on the regulations and seek by other means to delay the effective date. But, none of this will be certain or easy.”
The Obama Administration pointed out that the overtime standard hasn’t been updated since the 1970s, and that inflation has eroded overtime pay.