The National Retail Federation is putting pressure on the Obama Administration to rethink a proposal that would increase the number of workers entitled to overtime pay.
The NRF outlined its objections in a letter to Congress, imploring its members to co-sponsor the Protecting Workplace Advancement and Opportunity Act, which would provide a pause in the rulemaking process.
Current overtime regulations state that workers who make up to $23,660 per year ($455 per week) are entitled to overtime pay if they work more than 40 hours in a given week. The new regulations cast a wider net to include anyone making up to $50,440 per year ($970 per week.) According to the Department of Labor, the proposed regulation would improve wages for nearly 5 million people.
Obama stated that this regulation will help put an end to stagnant wages, fairly compensate workers who put in overtime, and will be good for businesses that already pay workers more and are undercut by companies that don’t.
However, the NRF sees things differently.
“We think this is the wrong approach to helping workers,” said J. Craig Shearman, vice president of government affairs and public relations for the National Retail Federation.
The association maintains that the measure would force employers to send workers home after exactly 40 hours, thereby preventing staffers from deciding for themselves whether they want to put in more hours, which can be a conduit to moving up the business ladder
“This just really starts to tie workers’ hands behind their backs,” Shearman said.
The organization also believes that the law would cause businesses to reduce employee bonuses and benefits, replace full-time workers with part-timers, and convert salaried employees to hourly positions with less flexibility or fewer career development opportunities.
Responses to the proposed ruling from the pool and spa retail industry have ranged from perplexed to exasperated.
“I don’t understand why it’s even necessary,” said Chris Callanan, owner of North Shore Pool & Spa in Wakefield, Mass.
He said most pool and spa businesses, including his, use a comp-time structure to handle employees who put in overtime, and that his employees have been happy with the arrangement.
Implementation of such a rule also could make it more difficult for retailers to promote from within, said Dale Howard, president of B&L Pools in Phoenix. Under the new regulations, he said, it would make more sense to bring in a new manager from outside the organization and pay her or him above the $50,000 threshold than to promote an employee who would need time to be trained.
“You can’t pay a [trainee] $50,000-plus,” Howard said.
He also fears that under the new law he may have to cut employee health insurance benefits to pay his staff more.
“It makes things more complicated,” Howard said. “You have to change what you’re doing to accommodate the rules.”
The regulation is scheduled to be announced in July.