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New federal overtime rule draws criticism from construction industry

By: 91Ƶ Newswire//May 20, 2016//

New federal overtime rule draws criticism from construction industry

91Ƶ Newswire//May 20, 2016//

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While federal officials defended a new rule that will let millions more white-collar workers claim overtime benefits, construction groups quickly disparaged the change as “unreasonable” and a job-killer.

The U.S. Department of Labor on Wednesday released a final rule extending overtime benefits to salaried workers who earn up to $47,476 per year. The limit had previously been set at $23,660.

Beyond that initial doubling, the rule will cause the salary threshold to be revised every three years to track changes in general wages. Labor Department officials estimate the new overtime protections will cover 4.2 million additional U.S. workers. The changes will take effect Dec. 1.

Although the new rule is intended to help salaried employees, it will not affect everyone in a white-collar job. It applies only to people in administrative, executive and professional positions, and thus will affect the construction industry only in certain sectors.

Brian Turmail, spokesman for the Associated General Contractors of America, said the new rule will mainly affect front-office and job site employees, such as superintendents and project engineers. The higher threshold will place a heavy burden on contractors, who have been given only six months to brace themselves for the hit to their budgets, he said.

“Given the fact contractors are being forced by private and public owners to deliver projects on tighter margins than ever before, nobody should labor under the assumption this new mandate will lead to increased compensation for people working in construction,” Turmail wote in an email. “Instead, contractors will be forced to put in place new measures to ensure that employees covered by the rule do not work more than 40 hours a week.”

Labor Department officials cautioned, though, that the change does not necessarily mean that employers have to start paying overtime more often. Those who want to avoid the new rule can do so either by: raising salaries above the $47,476 threshold, thus exempting the affected employees from the new requirement; or preventing employees from working more than 40 hours per week.

Labor Secretary Tom Perez wrote in a statement that the new rule will bolster the middle class.

“If you work full-time in America, you should be able to get by; when you work extra, you should be able to get ahead,” he said in a news release. “That’s the commonsense principle we’re reaffirming today.”

Other industry representatives, meanwhile, argued the new rule would just add to the regulatory burdens already besetting construction companies.

Officials at Associated Builders and Contractors Inc., a group representing nonunion contractors, said some employers might respond by replacing the salaries now given to some workers with wages. Although such a switch might make sense for someone watching the bottom line, it is unlikely to be embraced by those affected directly.

“This change may deprive employees of autonomy in their work schedules and may be perceived as a demotion to employees,” Vice President Kristen Swearingen said in a statement.

Swearingen said the rule also fails to take into account the fact that average incomes tend to vary from state to state.

“This will result in an unreasonable, one-size-fits-all mandate,” she said, “which will have a vastly different impact on employers in regions with a lower cost of living.”



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