The harmful effects of the new overtime regulations may be somewhat alleviated by new legislation.
Representative Kurt Schrader, D-Ore., has introduced new legislation proposing that the Labor Department’s new overtime regulations be phased in, rather than implemented all at once. If implemented, the new proposal would reduce the damage that the new overtime regulations will have on businesses across the U.S. The National Retail Federation (NRF) has announced that it is in favor of this new legislation.
“Representative Schrader’s legislation will help blunt the damage to America’s job creators that the reckless new overtime rules will cause unless Congress takes action by December,” NRF senior vice president for Government Relations David French said. “The Labor Department’s changes to the overtime threshold are too much, too fast for both employers and employees to adjust to without serious negative consequences for both. The Schrader bill addresses the ‘too fast’ part of the problem and we support it.”
Under regulations scheduled to take effect December 1, employers would be required to pay overtime to most workers who make up to $47,476 per year when they work more than 40 hours a week. That level is more than double the current threshold of $23,660, and the regulations include unprecedented automatic increases to the salary level every three years thereafter.
The Overtime Reform and Enhancement Act introduced today by Schrader would ease the impact of the regulations by allowing the threshold to rise to just under $36,000 this year, with the remainder phased in over the next three years.
NRF continues to support the Protecting Workplace Advancement and Opportunity Act, introduced in March by Senator Tim Scott, R-S.C., and House Workforce Protections Subcommittee chairman Tim Walberg, R-Mich. The measure would pause implementation of the regulations and require the Labor Department to complete a comprehensive analysis of the impact the changes would have on small businesses and lower-wage regions of the country. In addition, the bill would block the regulations’ automatic increases to the wage threshold.
“If left unchecked, these overtime rules will hobble the careers of millions of workers in the retail, nonprofit and higher education communities,” French said. “We appreciate the bipartisan efforts of lawmakers in both chambers to come to their aid and are pursuing all options to correct these misguided regulations.”
Research conducted for NRF shows that the overtime regulations will force employers to limit hours or cut base pay in order to make up for the added payroll costs, leaving most workers with no increase in take-home pay despite added administrative costs. A separate survey found that the majority of retail managers and assistant managers the regulations are supposed to help oppose the plan.