Manufacturing groups push back against White House plan to pay more workers overtime

Two manufacturing industry groups are pushing back against a proposed rule from the U.S. Department of Labor (DOL) that would guarantee overtime pay for most salaried workers earning less than $55,000 per year, up from the current cap of about $35,500.

If it becomes final, the change would extend overtime protections to 3.6 million salaried workers who are now paid at their standard rate while working more than 40 hours per week, even as their hourly wage colleagues collect time-and-a-half.

“We are committed to ensuring that all workers are paid fairly for their hard work,” DOL Principal Deputy Wage and Hour Division Administrator Jessica Looman said in a release. “For too long, many low-paid salaried workers have been denied overtime pay, even though they often work long hours and perform much of the same work as their hourly counterparts. This proposed rule would ensure that more workers receive extra pay when they work long hours. Public input is essential as we consider the needs of today’s workforce and industry demands, and we encourage continued stakeholder input during the public comment period.” 

Today’s announcement marks a “notice of proposed rulemaking” that will be open for public comment for 60 days once it is published in the Federal Register in the coming days. According to DOL, the government has already conducted 27 listening sessions with more than 2,000 participants including employers, workers, unions, and other stakeholders.

Some of that public comment has taken a critical stance against the policy. 

According to the National Association of Manufacturers, the rule would add undue regulatory burdens and compliance costs, NAM Managing Vice President of Policy Chris Netram said in a release. “Manufacturers have spent the past several years adapting operations and personnel management resources to meet the evolving needs of their workforce in a post-pandemic environment, including through improved wages and benefits and productive workplace accommodations. The DOL’s proposed rule would inject new regulatory burdens and compliance costs to an industry already reeling from workforce shortages and an onslaught of other unbalanced regulations,” Netram said.

Likewise, the National Association of Wholesaler-Distributors (NAW) said the rule would introduce further instability in an already strained labor market. “Compensation models have adapted over the years with factors like commissions, bonuses, out of office flexibility, and increased employer training, factoring into compensation decisions, all to the benefit of the employee, this rule ignores those advances and treats all workers the same. A new nationalized overtime rule would cause marketplace inefficiencies that would ultimately disadvantage those it means to help while driving up prices on consumers,” NAW CEO Eric Hoplin said in a release.