Chief of Content

Erika Taylor is the Chief of Content for Professional Remodeler. Contact her at etaylor@sgcmail.com or 972.803.4014.

Labor Pains: Thoughts on the New Overtime Rule

Virtually every group representing businesses, including the NAHB, opposes the Department of Labor's new rules regarding who is exempt from overtime pay 

June 09, 2016
Erika Taylor, chief of content for Professional Remodeler

There’s a large, reputable pool plastering company whose owner I knew back when I was active in that industry. I’ve been hearing his voice in my head a lot lately.     

Alan had a tough challenge. Pool plasterers are subs who compete largely on price and, as I’m sure you can imagine, most of them stretch every regulation possible to keep costs down—including labor laws. Alan, conversely, believes in following the rules even when he disagrees with them. Over the years, this has cost him millions of dollars in revenue as he loses out to low bidders who hire illegal workers and take other shortcuts. As a result, he’s become an activist, fighting for less regulation of small businesses and trying to get his state’s licensing board to enforce existing rules. 

Since the Department of Labor changed who can be exempted from overtime pay, Alan has been on my mind. Beginning in December, workers earning up to $47,476 a year would automatically receive overtime when working more than a traditional 40-hour week. That’s more than double the current threshold of $23,660.

Virtually every group representing businesses is vehemently against the change, including the NAHB, which said it “will result in severe repercussions that will harm workers, small businesses, housing affordability, job growth and the economy.” 

While I will spare you my rant against the new regulation, I do see a number of ways that it could affect the remodeling industry. For starters, I don’t think that any successful businessperson in history has ever said, “Hmm ... This new regulation is costing me money. I guess I’ll have to take less profit.” If company owners can’t adjust their employees’ schedule or lower their hourly wage to allow for the overtime, they will just raise the cost of their product or service. This makes all costs go up across the board. There’s also a loss of flexibility, advancement opportunities, and the new regulation doesn’t take regional differences in pay into account. 

That said, I’ve spoken with some people who are in favor of the change and I’m interested to hear more remodelers’ opinions on the topic. Do you think this will affect the industry? Will you need to make any adjustments to accommodate the change? Let me know your thoughts!

Comments

I do not have an issue paying overtime for anyone required to work over 40 hours a week. The total pay package (or lack thereof) in the industry is a major reason we have a skilled labor shortage. Not the only reason, but if a person can find work that is viewed as not as physically and mentally challenging and make more money, then most likely they gravitate to that.

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