Rep. Burgess Owens, R-Utah, joins “Mornings with Maria” to discuss the Biden administration’s move to expand overtime pay requirements and the upcoming 2024 election.
The Biden administration’s proposed rule to increase overtime for millions of workers could negatively impact small businesses already struggling with inflationary pressures, according to several trade groups.
The U.S. Department of Labor’s proposed rule, “Restoring and Expanding Overtime Protection,” would require employers to pay overtime to certain employees who earn less than about $55,000 per year – a dramatic increase from the current threshold of $36,000 .
The Biden administration’s proposal, announced Wednesday, was announced just in time for Labor Day and quickly drew criticism from retail and hospitality groups.
In a statement, the National Retail Federation noted that the Labor Department’s “proposed threshold is well above the rate of inflation,” adding that the administration may not have the authority to “tie the hands of future administrations through automatic increases.”
Biden administrator wants to demand overtime pay for millions more employees
The Biden administration’s proposed overtime rule would disrupt small businesses, trade groups warn (Getty Images | Getty Images / Fox News)
The last increase in the threshold occurred in 2020, when workers earning less than $35,568 per year were required to receive time-and-a-half overtime pay. Previously, the overtime limit was $23,660 in 2004.
Several trade groups disputed that the Biden administration’s latest proposal was too rapid a surge in such a short period of time.
“The Department of Labor’s proposal to once again raise the overtime pay threshold is a highly disruptive change that would have a negative economic impact for both hotel workers and employers,” said Chip Rogers, president and CEO of the American Hotel & Lodging Association (AHLA ).
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“Small business owners continue to struggle with rising business costs and inflationary pressures. If implemented, the DOL proposal would result not only in dramatic increases in labor costs for employers, but also in significant tax increases and administrative costs,” Rogers said.
The AHLA rejected the “one size fits all” approach, claiming the rule ignored the “flexible work arrangements” common in the industry and would reduce growth opportunities, lead to shorter working hours for workers and consolidate jobs. The AHLA also said the automatic increase in overtime thresholds, typically every three years, would place a heavy burden on small businesses.
Other critics of the proposal said the rule would make it harder for entry-level workers in some industries to find jobs.
Biden’s nominee for labor secretary, Julie Su, announced the overtime policy shortly before Labor Day (The White House YouTube)
“Companies simply cannot absorb such massive increases in labor costs,” said a statement from the Partnership to Protect Workplace Opportunity. “It will reduce opportunities, particularly for college graduates and young professionals hoping to enter the workforce.”
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The Biden administration called the proposed rule a victory for workers.
“For over 80 years, a cornerstone of workers’ rights in this country has been the right to a 40-hour week, the promise of going home after 40 hours or a higher rate for each additional hour spent working hard Get wages from your loved ones,” Acting Labor Secretary Julie Su said this week. “Workers deserve to continue to share in the economic prosperity of Bidenomics.”
The proposed rule could run into a difficult legal precedent set after the Obama administration’s attempt to raise the overtime threshold.
A federal court in Texas blocked Obama’s attempt to raise the Fair Labor Standards Act (FLSA) salary limit to $47,476, finding that the overtime standard was so high that the overtime exemption for managers was irrelevant.