The National Retail Federation has issued a statement following the release of the Department of Labor's (DOL) final overtime rule. Under the new provisions contained in the Fair Labor Standards Act (FLSA), unless exempt, employees covered by the Act must receive overtime pay for working more than 40 in a work week at a rate not less than time and one-half their regular rates of pay. 

“NRF acknowledges the steps that DOL took to phase in the full impact of the new rules in response to employer concerns,” the NRF said in a statement. “The delay in full implementation of the new higher threshold, for example, will enable retailers to prepare for the full impact of the rule more thoroughly. We remain concerned, however, that the new rules curtail retailers’ ability to offer the most flexible, generous and tailored benefits packages to lower-level exempt employees across the industry.”

Under the new provisions, there is no limit contained in the Act about the number of hours employees aged 16 and older may work in any work week. According to the FLSA, there is no requirement for overtime pay for work on Saturdays, Sundays, holidays or regular days of rest, unless overtime is worked on such days.

“We are also concerned that the Department has not provided adequate time for retailers to implement changes to the first phase of the rule, which will increase the minimum salary threshold from $35,568 to $43,888 by July 1, 2024. We urge the Department to allow until at least September 1, 2024, to implement this change,” the NRF said. 

Under the provisions of the act, an employee's work week is a fixed and regularly recurring period of 168 hours or seven consecutive 24-hour periods. The act applies on a work week basis and does not need to coincide with the calendar week. Work weeks may be established for differing groups of employees or individual employees. Averaging hours over two or more weeks is not permitted. Additionally, overtime pay earned in a particular work week must be paid on the regular pay day for the pay period in which the wages were earned.

“Even with the phased-in implementation timeline, the new rules will cause employers to reexamine compensation packages for millions of workers nationwide,” the NRF stated. “Some workers may lose the status of a managerial position. Some may lose much-desired flexibility as to when, how and where they work, including the ability to work from home. Some may lose the capability to travel on the employer’s behalf. Some may lose valuable educational and training experiences. 

“Retailers remain concerned that the inclusion of future automatic increases exceeds the Department’s legal authority and oversteps long-standing Fair Labor Standards Act and Administrative Procedure Act principles.”