New Overtime Regs Will Lead to Massive Number of Demotions

By NRF, Special for  USDR

The National Retail Federation today told the House Small Business Committee that new federal overtime regulations will lead to hiring freezes and layoffs for full-time workers if enacted as planned December  1.

“Proponents of this rule have touted the changes as a welcomed job creator,” NRF Senior Vice President for Government Relations David French said. “These claims are riddled with partial  truths.”

“Supporters of the rule who celebrate studies predicting a potential increase in part-time jobs fail to acknowledge to the public that any increase in part-time jobs comes at the expense of full-time employees’ hours and earnings,” French said. “The creation of part-time jobs due to hiring freezes or layoffs of full-time employees is hardly something to  celebrate.”

French’s comments came in a letter to members of the committee, which is holding a hearing today on the “damaging repercussions” of overtime regulations released by the Labor Department in  May.

NRF has argued that any job creation will come only if companies hire part-time employees who could work at straight time for a few hours a week rather than paying time-and-a-half to full-time workers when they go over 40 hours a  week.

NRF urged committee members to support the Protecting Workplace Advancement and Opportunity Act, which would pause implementation of the new 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’ requirement that the dollar threshold for overtime eligibility be automatically increased every three  years.

“These are studies that DOL should have undertaken before issuing its final rule and on which the public deserves an opportunity to comment,” French  said.

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 separatesurvey found that the majority of retail managers and assistant managers the regulations are supposed to help oppose the  plan.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation.

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