Money & Business

Obama Overtime Plan Draws Frosty Association Response

By / Jun 30, 2015 (via the White House Flickr page)

The president’s plan to expand the pool of overtime recipients through a rule change drew negative responses from key business groups this week. The change comes on the heels of a Supreme Court ruling that left the Affordable Care Act in place.

Associations are working overtime to take on a controversial overtime plan.

The plan, announced Monday night on the Huffington Post  blog by President Barack Obama, would expand the maximum threshold for overtime protections from $23,660 per year to $50,400 per year—a change that could open up overtime to as many as 5 million more Americans.

“That’s good for workers who want fair pay, and it’s good for business owners who are already paying their employees what they deserve—since those who are doing right by their employees are undercut by competitors who aren’t,” Obama wrote.

On Tuesday, the Department of Labor shared its proposed changes to the Fair Labor Standards Act. The department also recommends “updating the salary level to prevent the level from becoming outdated with the often lengthy passage of time between rulemakings.”

This proposal isn’t a law but it certainly reflects one—the law of unintended consequences at a time when the economy and those struggling the most can least afford it.

The plan came on the heels of last week’s significant Supreme Court victory on healthcare—something Obama highlighted in the very first sentence of his post. Like the healthcare news, the topic of overtime was not met warmly by key business groups.

“This proposal isn’t a law but it certainly reflects one—the law of unintended consequences at a time when the economy and those struggling the most can least afford it,” National Retail Federation Senior Vice President for Government Relations David French said in a statement. “Our research shows that the managers who would supposedly benefit oppose this plan and that few workers would actually see more take-home pay. There simply isn’t any magic pot of money that lets employers pay more just because the government says so.”

Angelo Amador, the National Restaurant Association’s senior vice president of labor and workforce policy and regulatory counsel, agreed.

“While we are still reviewing the Department of Labor’s proposed overtime regulations, at first sign, it seems as if these proposed rules have the potential to radically change industry standards and negatively impact our workforce,” Amador said in a statement on the rule changes.

In comments to Politico, the U.S. Chamber of Commerce called the strategy “another example of the administration being completely divorced from reality and adding more burdens to employers and expecting them to just absorb the impact.”

The moves, however, received a warmer response from labor unions, which have traditionally supported an expansion. In a statement, AFL-CIO President Richard Trumka said that the union “will continue fighting until every worker who deserves overtime protections is paid for all their time worked.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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