NADA protests Dept. of Labors overtime proposal

NADA protests Dept. of Laborês overtime proposal

NADA has filed comments with the Department of Labor (DOL) arguing that its proposed overtime rule would harm dealers and should be changed.

Under the current rule, all employees who make less than $455 a week ($23,660 annually) must be paid time-and-a-half after 40 hours a week. The proposed rule would more than double that salary threshold to $950 a week ($50,440 annually) and would require automatic annual increases. Under current law, employees are exempt from overtime requirements if they are executive, administrative, professional, outside sales, computer or highly compensated employees. DOL has also asked for comments on the job duties exemption, though it has not proposed to change it at least for now.

The higher salary threshold could cause problems for dealerships, says NADA. They could put stricter policies in place about how many hours employees are permitted to work, including checking email at home. Second, dealerships might revise pay plans to shift non-salaried employees to salaried to meet the threshold. –This would be disruptive for both employers and employees alike, especially if it serves to reduce an employeeês earning potential,” NADA wrote in its comments. Third, dealerships could adjust pay plans so employees receive most of their compensation through commissions so they would be exempt from overtime. Fourth, dealerships could decide to cut regular pay rates so they could pay overtime.

NADA makes several alternative suggestions for revising the overtime rule, chief among them being the elimination of the salary threshold altogether or counting all compensation toward the salary threshold.

Pointing out that most dealerships are small businesses, NADA concludes its comments by saying the association –strongly disagrees with the DOLês assessment that its proposal will not have a significant regulatory impact on small businesses.”

DOL is expected to issue a final rule next year. The agency received comments from more than 153,000 organizations.

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