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Retailers, Republicans Slam OT Rules

New regs could cut salaries, productivity

AP
July 2, 2015

The Obama administration’s proposed overtime regulations could severely limit the autonomy of workers and employers, according to business groups and legislative critics.

The National Retail Federation said the onerous regulations, which would mandate overtime payment for a broader class of workers, could affect the ability of businesses to complete jobs. The NRF, which represents thousands of businesses and millions of retail workers, said this could stifle productivity.

"The irony is that if [Obama] came under the new overtime rules he would have already hit 40 hours by now and his boss would have told him to clock out with the job half-done," NRF spokesman David French said. "We think managers are professionals who should be able to make their own decisions. This plan isn’t about expanding the middle class—it’s about turning salaried professionals into clock-watchers."

Obama touted the new overtime regulations during a speech in Wisconsin on Thursday.

"This is an issue of basic fairness. You work longer, you work harder, you get paid," he said. "It’s one of the single most important steps to raise middle class wages."

Business groups say that the regulations could have unintended consequences. The International Franchise Association (IFA), which represents thousands of businesses, announced its "strong opposition" to the proposal.

"This change is likely to have the opposite of its intended effect and will clearly harm more workers than it helps," IFA spokesman Robert Cresanti said in a release. "Millions of salaried workers will now become hourly and lose out on key benefits such as workplace flexibility and long term advancement opportunities. This is just the latest example of the Obama administration unnecessarily meddling in the everyday management of small businesses."

Congressional Republicans have also criticized the new regulations for boosting government oversight and micromanagement of business matters more than actual employee wages. The House Joint Economic Committee released a report on Thursday questioning its efficacy. The regulations could lead employers to cut down on wages to control costs in the event of overtime and "will impose unnecessary costs, hinder economic expansion, and more likely limit workers’ earnings potential than enhance it," according to the report.

"Once again, the Obama administration is overreaching and imposing broad new regulations on employers that will require them to devote precious resources to costly regulatory compliance," Committee Chairman Dan Coats (R., Ind.) said in a release. "As with the administration’s minimum wage proposals, this overtime rule is unlikely to result in many employees seeing larger paychecks and could instead limit employment opportunities for workers."

That report followed an American Action Forum study that found that nearly 70 percent of workers affected by the regulation are in families with combined incomes that are already earning far more than the national poverty threshold. Coats urged the Obama administration to look for other avenues to boost wages for workers.

"A better way to strengthen the middle class and tackle income inequality is to enact pro-growth policies that will improve the economy for all Americans, such as approving future free trade agreements and passing comprehensive tax reform," he said.

The Department of Labor is accepting public comment from businesses, unions, and other interested parties.

Published under: Obama Administration