Business Overtime Expenses Could Soon Skyrocket

The U.S. Department of Labor is likely to release a draft regulation later this month that would increase the federal overtime salary threshold from the current $23,660 to $50,440, which could impact just under 20,000 residential construction supervisors according to preliminary estimates from NAHB economists.

NAHB, along with our broad-based coalition of business organizations known as the Partnership to Protect Workplace Opportunity, met with the White House last week to express our concern about the impending rule.

The House Education and Workforce Committee held a hearing on this issue today and NAHB sent a letter to lawmakers stating that such a unilateral action by the administration could raise wage costs and result in fewer jobs.

“NAHB is concerned that changes to the current overtime standard will reduce job-advancement opportunities and the hours of full-time construction supervisors, leading to construction delays, increased costs and less affordable housing options for consumers,” the letter stated.

Under current law, workers who earn less than $23,660 a year are considered non-exempt employees by the Department of Labor and employers must pay them time-and-a-half for any hours they work over a traditional 40-hour work week. The administration has directed the Department of Labor to update the administrative/executive exemption to overtime requirements.

With the Department of Labor reportedly considering more than doubling this overtime threshold to over $50,000, NAHB and others in the business community argue that such a dramatic surge is unlikely to result in an increase in workers’ take-home pay. Rather, it would force business owners to structure their workforce to compensate by scaling back on pay and benefits, as well as cutting hours to avoid the overtime requirements.

NAHB continues to monitor the situation closely.

For more information, email Suzanne Beall at NAHB or call her at 800-368-5242 x8407.


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Comments (3)

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  1. steve says:

    When taking compensation into consideration will paid holidays, vacations, personel days and health insurance be taken into account for total pay?

  2. Harry Crowell says:

    this is just another reason to only elect Republicans.
    The Democrats believe in increasing costs to all businesses and to the government in every way they can imagine. Then they fill the new government employment ranks with more enforcers.
    Yes the Republicans do the same but at a much lower rate, and their reasons are because it gains a lot more voters in the increased government payroll.

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