Overtime Rule Could Affect More than 110,000 Construction Supervisors

12 hours clockThis post was updated July 14 to reflect that NAHB filed a 90-day extension of the comment period.

The U.S. Department of Labor released a draft regulation on June 30 that proposes updating the salary level at which certain “white collar” workers would be exempt from minimum wage and overtime pay from the current $23,660 to $50,440.

NAHB economists have released a state-by-state breakdown showing in total, more than 110,000 construction supervisors would no longer be eligible for the exemption, and may be overtime-eligible under this new rule.

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 Fair Labor Standard Act’s white collar exemptions exclude certain executive, administrative, and professional employees from federal minimum wage and overtime requirements. Certain computer professionals and outside sales employees are also excluded from these requirements.

The new proposed overtime regulations would take effect on Jan. 1, 2016.

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.

With the Department of Labor acting to more than double 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, along with our broad-based coalition of business organizations known as the Partnership to Protect Workplace Opportunity, met with the White House last month to express our concern about the impending rule.

There is currently a 60-day comment period that closes on Sept. 4 and NAHB will be submitting a written statement detailing our concerns and opposition to the rule. On July 14, NAHB filed a request for a 90-day extension to the comment period. In addition, NAHB will continue to work with our trade and business coalition partners to seek changes to the rule, and we will also focus on a congressional strategy that will seek to blunt the rule through the appropriations process.

View the complete state-by-state breakdown.

View an FAQ from the Department of Labor on the proposed overtime rule.

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

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Comments (17)

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  1. Shirley Wiseman says:

    This will be catastrophic for our industry………

  2. Tom Panek says:

    So paying a supervisor a decent salary without working him ragged may result in scaled-back benefits, pay cuts, and increased construction costs? Is the only objective here to maintain the bottom line? I understand the need for a profit.But I also have to wonder how much quality is sacrificed or lost, and how much on-the-job safety issues increase when a person works a 60-70 hour week in the field. I also wonder if employers wouldn’t actually save money by hiring more supervisors and paying less overtime.

    • Robert Taylor says:

      I agree with Tom! I think the use of more supervisors would increase the quality of work and increase the on job safety. Isn’t that what we really want??

    • Jack Black says:

      Start a business, work hard for years to make it successful, pay yourself substandard wages until the business can afford to pay you what you need, make all the scrafices that need to be made, pay every insane tax and fee that is required of you, pay your employees a competitive wage, try to make a profit each year and then and only then you will be qualified to make a comment about this subject. You obviously do not sign your own paychecks and do not know the inner workings of running a successful business. You say that you wonder about all these questions you have. If you ran a business you would not “wonder” about these mystical questions. It sounds like you are not happy with your job that someone gave you. This proposed regulation would damage this industry. If it gets passed the end result would be all the “Toms” of the world complaing about how eveything costs so much more.

      • After investing over 40 years into the construction industry and coming up through the ranks, I am in total agreement with Mr. Black. First off, we pay our workers the going rate plus a little extra while offering paid vacation time, 5 holidays & 2 sick days. I would gladly give my “family” workers more if the mob,Our Government”, wasn’t stealing so much from us. This country is littered from one end to the other with so many businesses that have failed in the last 7 years that it is criminal for members of congress to impose more burdensome laws on us. We have a chance next year to try and right things just a little by putting someone in the White House that understands business. A Governor is like a father of a large family and has to solve problems every day that works for the whole family. A Senator is like a neighbor watching the family next door and making a decision based on all the neighbors, “lobbyists”, comments. My vote will be on a Governor, someone who has to “fix” problems & make them work, not just legislate them. Finally, if an employee and an employer reach an agreement for a specified amount of money for a specified job description, that’s called FREE trade. I don’t need to have an inexperienced legislator to tell me how to negotiate my business practices.

  3. Bert Gurganus says:

    Thank you, Tom Panek!

    It’s disgusting that any business owner would consider a threshold of $24,000 a legitimate or fair amount for a supervisor who is required to work more than 40 hours a week. That’s $12 per hour if the supervisor works 50 weeks per year for 40 hours per week with ZERO overtime. Under the current rule, if that supervisor works 50 hours per week for 50 weeks per year, that’s an hourly wage of less than $10 per hour. How many contractors/business owners would even consider working for $10 per hour?

    Raising the pay of these supervisors will mean 110,000 more employees who are better able to purchase or renovate the homes that we build.

    Will the Home Builders Association ever focus on the welfare of the workers who make our industry function well and be a little less concerned about the profits of the owners and investors? I certainly hope so.

    • SS says:

      You’re a fool if you think anyone is getting paid 24,000 as a supervisor. That is not the point. When you own and run a business then comment. Otherwise you’re just showing your ignorance. And if you don’t like your job, quit it and find another. And BG, If there are no profits for owners and investors there will be no jobs!

  4. Brenda says:

    Be sure to check your State laws; they supersede the FLSA minimums.
    The State of Arkansas has higher standards.

    See below:

    10. Q. What if a state has its own overtime laws?

    A. The FLSA provides minimum standards, and does not preempt a state from establishing more protective standards. If a State establishes a more protective standard than the provisions of the FLSA, the higher standard applies in that State.

  5. Brenda says:

    Sorry I left out the word “may” supersede.

  6. wes says:

    HAHAHAHAHAHA you get what you pay for. i pay my cleanup guys around 25k, my supers around 50k, and project managers 100k, with fringes. if you are paying a super 25k I would hate to see what your product looks like, or do you just have a body out on the job.

  7. Shanna Edwards says:

    More $$$ in our business owners pockets equates to more jobs. It’s ridiculous to pay salary plus overtime. This is going to go through with an election year looming & disenfranchised small businesses going under left & right that are the lifeblood of the country. If an employee doesn’t like being at the whim & call of the powers that be, come over to the dark side with the rest of us & run your own business or work off of straight commission. Survival of the fittest.

  8. Shanna Edwards says:

    & all they are saying is if you pay your guys $20/hr you don’t have to pay $35/hr when they hit 40hours. Or you don’t have to pay overtime on your salaried employee that you’re paying $2k a week to. Seriously??? Didn’t even read the comments before I posted my previous comment or would have added it there.

  9. Shanna Edwards says:

    *2k a week to you salaried employee plus overtime when they hit it which is technically due them even though they never get it. It is the law even for salaried employees. I personally put in 70 hours last week as a self employed. You guys can do the math.

  10. Shanna Edwards says:

    & there are no “white collar workers” in this income bracket. You guys will willingly bonus your guys on performance, it should NOT be mandated by the government how you take care of your people. They’re putting the onus back on you my friends!!! This is a positive thing for you!!!!

  11. Mark says:

    “Only a virtuous people are capable of freedom. As nations become more corrupt and vicious, they have more need of masters.”
    Benjamin Franklin

    If our industry does not start treating workers as well as other industries treat theirs, expect the government to do it for us. If you want a warm body, hire a temp. If you want a loyal, trained, competitive workforce without a union or a bunch of new laws then people have to be treated fairly.

    I appreciate that the NAHB fights imposing government regulation, but the longterm solution is to increase the value of the workforce and promote a level play field between companies. This means stop hiring1099 workers. Demand our industry to hire companies with real employees who do quality work.

  12. Paul says:

    Most of these “supervisors” in the housing industry make less than some of my apprentices. That’s why we had to pull out of the housing market years ago. It is tragic how bad the industry has become. That’s why illiegals are about the only ones doing it anymore. Doing jobs “Americans wont do” it is really jobs “Americans cannot afford to do. ” as a business owner, I feel a responsibility to my family and to my employees families to keep them paid at a level that they can be happy with. I know far too many business owners that make far less per hour than some hourly people working in the fast food industries. And some of their employees make far less than the minimum wage.
    And on top of all these problems in the housing industry, We have a government that is hell bent on telling us all how it has to be done. I’m all for the NAHB standing up against government tyranny, we don’t need any more regulations. But these same people should do a better job of policing their own companies for the good of the industry as a whole.
    Treating workers and subcontractors like dirt under their feet creates the mess that we have now.

  13. Jay says:

    YES!!!! It is always about the bottom line and profitability people. If neither exist then jobs don’t exist. The people that are working the so called extra hours AGREED to the terms of their employment, their pay and job requirements. No one forced them to take the job or to any extra work that they do. If they are not happy they can find another opportunity else where. This is not a communist nation we don’t force people to work. WE the employers have to make a profit to be able to provide jobs and it’s getting harder everyday. In the last 5 years labor costs have sky rocketed due to lack of labor force and material has also. Profit margins are half of what they were. Home prices haven’t followed labor and material costs which is the cause of profit losses. Of there’s no profit people, there’s no jobs. We all care about providing people with jobs so they can live the dream and have a better life than their parents did but lay offs happen if there is no profit.
    You employee minded complainers need to start a business and learn what a P&L sheet is. That’s “Profit and Loss” for those that don’t know. Take the fianacial risk that we employers do, then and only then do you have a right to complain and demand better wages. Everything that the government gets involved in causes it to fail. The home building industry will fail if the government gets involved, it’s barely surviving now.

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