Congress told rule change will lead to hiring freezes, layoffs
WASHINGTON – New federal overtime regulations scheduled to go into effect on December 1 will hurt the very workers they are meant to help, the National Retail Federation told the House Small Business Committee on Thursday.
“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 was holding a hearing on new overtime regulations that were released by the Labor Department in May.
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 separate survey found that the majority of retail managers and assistant managers the regulations are supposed to help oppose the plan.