By Ross Eisenbrey, Economic Policy Institute
The National Association of Homebuilders (NAHB), both in congressional testimony and in the official comments it submitted to the Department of Labor, makes a strong case for the Obama administration’s proposed rule on the overtime rights of salaried workers. Yes, you read that right: NAHB makes an ironclad case that businesses will have little difficulty adjusting to the proposed rule change.
Naturally, NAHB, which claims to represent 140,000 members involved in “home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction,” testified before Congress that the DOL proposal would be the end of Western Civilization. But the data they presented tell a different story.
NAHB’s own survey of its members found that two-thirds would make no changes in their policies or operations. Many, of course, already pay their supervisors more than $50,440 a year and would be unaffected. Of the one-third that would make adjustments, most would do exactly what the rule contemplates: they would reduce the amount of overtime their supervisors work. Twice as many firms would raise the salary of their supervisors above the $50,440 threshold as would reduce their salary. And only 13 percent of the firms that said they would make a change would switch their supervisors from salary to hourly wage. In other words, just 4 percent of home builders would convert their salaried supervisors to hourly pay.
It is noteworthy that of the four top responses among the home builders who say they will make changes, two are undeniably positive—raising salaries and reducing overtime hours worked. Apparently, Ed Brady, the NAHB official who testified in the Small Business committee, is one of the few home builders in America who would contemplate outsourcing the role of construction supervisor in order to avoid paying overtime. Any contractor who employed that supervisor would have to deal with the same issues as Mr. Brady, and would charge for the costs they entail, plus a profit— so perhaps it’s not surprising that Mr. Brady is alone in planning to outsource his supervisors.
Clearly, the NAHB’s own evidence shows that DOL’s proposed changes in the overtime rules will have small, mostly positive effects on the homebuilding industry and its employees.