The National Retail Federation Hates the Proposed Overtime Rules (Even Though No One Knows What They Are)

The National Retail Federation (NRF) doesn’t know what the U.S. Department of Labor’s new rules concerning exemptions from overtime protections will be, but they know they’re against them.  Claiming to speak on behalf of managers who might be affected by the not-yet-released rules, NRF says: “Retail managers say the proposed changes to the federal Fair Labor Standards Act regulations show the Department greatly misunderstands their roles in the workplace and would effectively strip retail managers of their salaried status, generating negative consequences for the entire industry.”

But unless someone has leaked the proposed rule to them, NRF is just making things up! What are “the proposed changes to the federal Fair Labor Standards Act regulations” that the managers disapprove?  NRF doesn’t say. Equally important, what did NRF tell the managers it surveyed? Why do “75 percent of respondents” say “the changes would diminish the effectiveness of training and hinder managers’ ability to lead by example”? I personally doubt very much the proposed rule, if it is ever issued, will say anything about training.

Some of the NRF report’s “key findings” are pretty wild. For example, “Duties and salary are not effective litmus tests for successful management.” The Fair Labor Standards Act requires employers to pay an overtime premium to all employees, including managers, unless they are bona fide executives, administrators, or professionals. The definition of “executive” has always, since the FLSA was enacted in 1938, used duties tests and the salary level to determine who is a bona fide executive. That is the case today, so the “key finding” is nonsense. The question for the Department of Labor is what salary level is an executive salary? Is it $70,000 a year, or is it the current $23,660 threshold set by the Bush administration in 2004?

I’m willing to bet that very few Americans think $23,660 is an executive salary, and that most retail managers would agree that it isn’t. I’m also willing to bet that most retail “managers” making $24,000 a year and spending more than half their time in customer service, restocking shelves, changing displays and other menial tasks would be more than happy to lose their “manager” title in exchange for overtime pay, especially since some of these “managers” now make less per hour than minimum wage workers, after unpaid overtime is taken into account.

My favorite “key finding” is the following:  “Divesting retail and restaurant managers of their executive status by making them hourly employees threatens their self-worth and undermines many of the benefits tied to the managerial role.” What could the question have been that they were answering? What if their pay increased as a result of the rule change, or they got the same pay but got to spend 20 hours a week with their families that they currently spend, unpaid, at the store? How would that affect their “self-worth”? What “benefits” would be undermined if they were paid hourly? A nationwide survey found that “managers” earning less than $50,000 a year don’t really have any benefits in terms of flexible schedules or control over their work day that hourly workers don’t have.

NRF surveyed only 200 managers nationwide and its report says nothing about their current salaries or work hours. It would be kind to be merely skeptical about a survey like this. Perhaps they’ll share the survey instrument, their methodology for choosing the managers they surveyed, and some salary information. Or perhaps, not.