As Biden announces new overtime rule, businesses and GOP voice criticism
NOTE: Associated Industries of Missouri is the sole official designated partner of the National Association of Manufacturers in Missouri.
The Toledo (OH) Blade (5/18, Provance) reports Vice President Joe Biden visited Columbus, Ohio to announce the Labor Department’s new rule on overtime pay. The White House estimates the new rules, which would impact approximately 4.2 million full-time American employees by increasing the overtime threshold to salaries of $47,476 a year, “would increase wages by an average of $1.2 billion a year over 10 years.”
NAM, Business Groups, And GOP Lawmakers Criticize New Rule. The Cleveland Plain Dealer (5/18, Koff) writes that “business groups, their lawyers and Republicans hate” the new overtime pay rule. The Plain Dealer highlights quotes from various business groups, including a statement from NAM Vice President of Labor, Legal, and Regulatory Policy Rosario Palmieri, who said that the “regulation creates barriers to opportunity, severely limiting flexibility and dramatically increasing red tape, especially for small manufacturers who cannot afford the burdens of a 99 percent salary increase for management employees who are exempt from overtime pay.” Palmieri added, “Even worse, the administration has also required there to be future automatic increases, which creates uncertainty in planning for future years.”
International Business Times (5/18, Resnikoff) reports that while businesses knew that the Obama administration was preparing to issue its new rule, it did not make its issuance “any less infuriating.” In a statement denouncing the rule, Palmieri said it was “just the latest in what has been a deluge of regulations from this administration.” The Business Times notes that Palmieri is not wrong, as the overtime rule “was preceded by a long succession of rules targeted at working conditions.” National Retail Federation Senior Vice President David French also “denounced the final overtime rule as a ‘career killer.’”
Supermarket News (5/18) reports that the Food Marketing Institute and the National Grocers Association also “expressed disappointment” with the new rule.
A Wall Street Journal (5/18, Subscription Publication) editorial states that the administration is acting to artificially inflate incomes in an election year after seven years of relative stagnation in a political move that will hurt workers.
The New York Times (5/18, Max, Subscription Publication) says “many small businesses are scrambling to figure out how to factor the regulations into their bottom line,” and the Milwaukee Journal Sentinel (5/18, Stein) reports that “government and charitable groups” are also saying “the measure would raise their costs beyond their means to pay.”
Bloomberg Politics (5/18, Dorning) reports Senate Majority Leader McConnell “blasted the rule as ‘more red tape’ for businesses,” while House Speaker Ryan said in a statement, “This regulation hurts the very people it alleges to help. By mandating overtime pay at a much higher salary threshold, many small businesses and non-profits will be unable to afford skilled workers and be forced to eliminate salaried positions, complete with benefits, altogether.”
The My Dayton (OH) Daily News (5/18, Tucker) says Republicans “have promised to block the regulations during a required review by Congress.” The Albany (GA) Herald (5/18) reports Sen. Johnny Isakson said he will co-sponsor legislation to block the new rule. Isakson, who chairs the Senate HELP Committee Subcommittee on Employment and Workplace Safety, said, “This overtime pay rule adds burdensome new regulations on businesses while doing nothing to grow our economy.”
Quartz Analysis: New Overtime Rule May Increase FLSA Lawsuits. A Quartz (5/18, Bindrim) analysis states that while the Labor Departments new overtime rule may cost US businesses $12 billion in additional pay over the next decade, another reason for businesses to be wary is the new rule may further increase the rise in Fair Labor Standards Act lawsuits filed, which “has already skyrocketed, to 8,781 in 2015 from 4,039 a decade earlier.” Quarts notes that “a majority of those lawsuits relate to overtime.” Quarts states businesses must now assess “newly eligible employees and comparing the cost of their potential overtime to the potential loss of their ‘overtime’ productivity.”