The U.S. Department of Labor (DOL) is expected to publish the final version of its updated overtime rule any day now. According to recent reports from Bloomberg BNA and Politico Pro, the rule change will raise the salary level at which employees qualify for overtime pay from $23,360 annually to an $47,476 — a slight decrease from  an earlier figure of $50,440 per year, but still double the current threshold. The National Association of Home Builders (NAHB) says the rule change could affect at least 116,000 construction supervisors, as well as many other workers in housing and construction.

“This drastic hike would still wreak havoc on the residential housing sector, the nation’s small businesses and the economy,” said Ed Brady, chairperson of the National Association of Home Builders (NAHB) and a home builder and developer from Bloomington, Ill. “This proposal is clearly not serious and is unacceptable to America’s small businesses.”

Brady said the rule change would hurt job and economic growth.

“There is no reasonable approach or road map on how this would be phased in without resulting in severe economic repercussions,” he said. “If the $47,000 overtime threshold were to become law, it would hurt millions of small business owners, including home building firms, by forcing them to scale back on pay and benefits, as well as cutting workers’ hours to avoid overtime requirements. Indeed, it would be particularly harmful to the housing community, as the vast majority of home building firms have fewer than ten employees.”

Those sentiments were echoed by Jay Timmons, the CEO of the National Association of Manufacturers, in a September 2015 guest blog post for The Hill.

“The administration’s new overtime rules will effectively demote 5 million workers and take away flexibility in many workplaces,” Timmons writes. “What is more, contrary to the administration’s claims, rather than raise wages, more employers will likely reduce workers’ hours or reclassify them. So much for helping middle-class families.”

The Obama administration, which supports the proposed rule changes, argues that the salary threshold requirements for overtime pay haven’t kept up with the rate of inflation.

Brady said NAHB would like to work with DOL to come up with a better solution.

“We stand ready to work with DOL to craft a practical plan that would gradually ramp up the current overtime threshold so that it does not result in real hardship for small businesses,” he said. “The rule should also take into account regional variations in wages and cost of living when determining its formula. Such a measured response would help small business, workers and the economy.”

 

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