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Effect of New Overtime Rules

Aug. 31, 2016
The National Retail Federation is advocating that Congress pass the Protecting Workforce Advancement and Opportunity Act, which would change and nullify the new overtime rules. 

The Department of Labor issued its final rule making changes to the overtime exemptions under the Fair Labor Standards Act on May 18, 2016. The rules were published in the Federal Register on May 23, 2016.

The National Retail Federation (NRF) is not in favor of these rules and says that retailers need to understand the rules. 

Here are some highlights of the new rules.

  • The salary threshold will move to $913/ week or $47, 476 per year.  This change more than doubles the previous salary threshold.
  • Salary threshold will automatically increase every three years. The NRF says that this change is an “overreach of DOL’s authority and will not take into account economic conditions, geographic cost-of-living difference or specific impact on certain industries.”
  • Highly compensation employee exemption will be $134,000. This category of employees is subject to an abbreviated version of the duties tests and is generally exempt from overtime pay.
  • Up to 10% of the salary can come from bonuses or commissions.

“Our research shows that the managers who would supposedly benefit oppose this plan, and that few workers would actually see more take-home pay,” says National Retail Federation Senior Vice President for Government Relations David French. “There simply isn’t any magic pot of money that lets employers pay more just because the government says so.”

The NRF is advocating that Congress pass the Protecting Workforce Advancement and Opportunity Act, “which would change and nullify this rule and require DOL to perform an economic analysis of how changes to overtime rules will impact non-profits, small businesses and employers in other vulnerable industries before issuing new rules."

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