The Retail Industry Leaders Association (RILA) issued the following statement in response to proposed new federal overtime rules released today by the U.S. Department of Labor. The proposal more than doubles the salary threshold for non-exempt employees. Kelly Kolb, RILA Vice President of Government Relations at RILA, said the overtime proposal would dramatically increase operational costs for retailers while taking away the flexibility and benefits currently provided to full-time employees that have advanced into management.
"Retailers currently provide tremendous flexibility and growth opportunities for associates. Once promoted, hard-working associates want to be classified as exempt because of the flexibility, incentive compensation, benefits and distinction that comes with such a designation.
"Retailers will have two options if this rule is implemented: raise prices in order to absorb a dramatic increase in labor costs, or take away the benefits, such as flexibility and leadership opportunities, that come when an associate works their way into management. Neither of these are outcomes that will raise standards of living for our employees or our customers.
"RILA is deeply concerned about the unintended consequences of this rule change and will provide the Department with comments highlighting the impact that this flawed proposal will have on retailers, their employees and their customers."
RILA is the trade association of the world's largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.