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More Overtime Pay, Less Future for Front Line Brand Ambassadors

March 25, 2016

The National Retail Federation (NRF) isn’t doing anything remotely resembling a happy dance over a U.S. Labor Department (DOL) proposal to greatly expand the number of American workers eligible for overtime pay.

In fact, the NRF has thrown its support behind just-introduced legislation called the Protecting Workplace Advancement and Opportunity Act. It’s a proposal that would require the DOL to conduct a comprehensive economic analysis of the impact of its proposed overtime pay expansion on small businesses, nonprofits and public employers.

The legislation is intended to “push the pause button” on the overtime pay plan.

The NRF versus DOL conflict is a battle for the hearts and minds of front line retail workers who are the key to customer satisfaction. For many retailers, the employees serving at the counter, walking the floor and on the phone – ARE the brand.

DOL’s goal is to significantly increase overtime pay coverage. Under current rules, most employees making up to $455 a week ($23,660 a year) are automatically entitled to overtime pay when working more than 40 hours a week.

Managers and professionals who make more can be declared exempt from overtime, but only if they meet certain conditions such as having supervision of other workers as their primary duty. The DOL overtime reform plan would raise the wage threshold to $970 a week ($50,440 a year).

Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans.

The DOL says its changes would raise millions of low-wage workers out of poverty. The NRF says the DOL changes are “extreme.” NRF Senior Vice President David French says they would be “a career-killer for retail middle managers” trying to move up the professional ladder.

“What’s more, this one-size-fits-all mandate doesn’t work in rural areas where income and the cost of living are lower,” French said. He said retailers strongly support congressional efforts to block “this poorly thought-out plan to turn salaried professionals into clock-punchers with less flexibility and fewer career development opportunities.”

A study conducted by Oxford Economics for the NRF found that raising the overtime threshold wouldn’t increase net pay for most employees. Instead, many employees would see their hours reduced, while others would see their base wages, benefits or bonus pay decreased to offset the added payroll expense.

“Retailers want to help their workers succeed,” French said. “But we believe careers are the answer, not time clocks.”