Retailers and other employers are waiting for the Trump administration to issue new regulations expected to significantly roll back a major expansion of overtime requirements that has been in limbo since the 2016 elections.
Under rules issued by the Labor Department in 2016, during the Obama administration, most workers making up to $47,476 a year would have automatically qualified for overtime, up from $23,660 set in 2004. But a federal judge issued an injunction against the rules before they could take effect that December, agreeing with NRF and other groups that sued over the regulations that DOL had overstepped its authority. After President Trump took office in 2017, DOL withdrew the rules and asked for input so it could consider issuing a more realistic version that would be better for employers and workers alike.
In comments filed with DOL in September 2017, NRF said the threshold for exemption from overtime set by the Obama administration was too high and that any new level set under Trump should be lower and account for regional and industry differences. In November 2017, Labor Secretary Alexander Acosta said DOL was looking at a more measured increase but that it could include “self-adjusting” updates that might be tied to inflation. NRF is opposed to any automatic updates. DOL has set a target date of March 2019 to release its revised version of the regulations, but there has been no further indication of what the revision might include.
NRF opposed the 2016 regulations because of their impact on career opportunities and because they would have reversed progress seen since the 2004 update, which eliminated vague language that had caused extensive litigation over disputed overtime.
Why it matters to retailers
Under the wage level proposed under Obama, overtime would have been mandated for many retail store managers and assistant managers, taking away their ability to use their own discretion in deciding whether to put in the extra hours sometimes needed to do their jobs. Retailers were concerned that putting managers under overtime rules would undermine their status as career professionals rather than hourly workers.
A survey of retail managers conducted for NRF found the majority opposed overtime expansion, with 75 percent saying it would diminish the effectiveness of training and hinder their ability to lead by example. Another NRF study found expanded overtime would drive up retailers’ payroll costs while limiting workers’ opportunities to move up into management. Given the tight economy, many employers would limit hours or reduce base pay to compensate, meaning most workers would be unlikely to see an increase in take-home pay, the study said.
NRF advocates against overtime expansion
NRF told DOL during public review of the Obama regulations that overtime expansion would have been a “step back” for career-track workers. NRF believed the $47,467 level was too high, and that the plan would have limited career opportunities by “turning managers into rank-and-file hourly workers.” NRF later filed suit against the regulations, a move that was successful in keeping them from taking effect until after the election, when they were ultimately set aside by the Trump Labor Department.