WASHINGTON (March 21, 2014) — The Tire Industry Association (TIA) and the Automotive Service Association (ASA) oppose President Barack Obama’s executive order expanding overtime pay to cover millions of salaried workers.
The Bowie-Md.-based trade group said raising overtime pay will cause the labor costs of small business owners to explode.
TIA expressed its opposition immediately to Mr. Obama’s order, as did the Small Business Legislative Council. “An owner of multiple stores may have salaried managers at each store,” TIA noted in the March 17 issue of its Weekly Legislative Update.
Mr. Obama sent his memorandum to Labor Secretary Thomas E. Perez March 13, directing him to begin the process of strengthening overtime pay protections under the Fair Labor Standards Act.
“The overtime rules that establish the 40-hour workweek, a linchpin of the middle class, have eroded over the years,” the White House said in a statement accompanying the president’s order.
“For example, a convenience store manager or a fast food shift supervisor or an office worker may be expected to work 50 or 60 hours a week, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay,” the White House said.
The Labor Department established a threshold of $250 a week in 1975, below which white collar workers were entitled to overtime pay. In 2004, that threshold was raised to $455 a week, which is where it has remained, according to the White House.
“This is below today’s poverty line for a worker supporting a family of four, and well below 1975 levels in inflation-adjusted terms,” it said.
SESCO Management Consultants, TIA’s consultant on labor laws, issued a press release March 14 saying the Obama administration’s overtime pay directive could end up being prohibitively expensive for small business owners.
“White the memorandum provides little detail about the changes to come, SESCO predicts the Department of Labor will raise the current minimum guarantee salary threshold…to at least $1,000 a week,” SESCO said. “Thus, for a position to be eligible for an overtime exemption, he/she must be guaranteed at least $52,000 a year.”
As a member benefit, TIA retains SESCO, which members can consult for any questions involving federal labor laws, according to TIA Executive Vice President Roy Littlefield.
“Whenever I go to a dealer conference and there is a seminar about federal labor laws, the room is always packed,” Mr. Littlefield told Tire Business. “Labor laws are so complex, and it is so easy for a tire dealer to make a mistake.”
As of March 20, the Labor Department had put no notice in the Federal Register about implementing the president’s overtime pay directive.
ASA Washington Representative Robert L. Redding told Tire Business the association will probably submit comments to the docket when the Labor Department requests them.
However, Mr. Redding said, Mr. Obama’s memorandum is another example of the federal government foisting new burdens on small businesses without first requesting their input.
“Here we are — another federal agency, without stakeholder outreach, trying to find out what works and what doesn’t work,” he said. “Independent auto repairers are coming through a horrendous economic period, and the last thing we need is another cost burden.”
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