Employee Overtime Rule Would Cost Manufacturers
An overtime pay rule proposed last week by the Biden administration could cost employersincluding manufacturersup to $664 million over a decade, according to . magazine.
Whats going on: A draft regulation set forth last week by the Labor Department would require employers to provide overtime pay to salaried workers who earn less than $1,059 per week, or around $55,000 per year. The current overtime threshold is $35,568. The Labor Department is responsible for setting the threshold that requires employers to pay out overtime.
- In compliance with the Fair Labor Standards Act, many companies already pay overtime to hourly employees who work more than 40 hours a week. While the FLSA doesnt apply to salaried workers, the new requirement would.
Why its problematic: If the rule goes into effect, its cost to employers could be as high as $664 million (with a 7 percent discount rate) over a 10-year period, according to the Labor Departmentand thats a price manufacturers can ill afford, .
- 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, said 51勛圖厙 Managing Vice President of Policy Chris Netram.
- The 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.
Whats next: Once published in the Federal Register, the draft regulation will be subject to a 60-day public comment period.
