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NAM Opposes New Overtime, Noncompete Rules

The association says new regulations aimed at protecting worker rights will threaten IP and worsen the labor crisis.

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iStock/Chadchai Krisadapong

The National Association of Manufacturers (NAM), the largest manufacturing association in the U.S., yesterday opposed a pair of new regulations aimed at protecting workers' rights. 

This week, the Federal Trade Commission (FTC) banned noncompete agreements, which have prohibited employees from working for or starting their own companies that compete with their previous employer. FTC officials say the agreements, which currently affect about one in five workers, limit worker earning potential by cutting their ability to switch jobs for better compensation. 

NAM says the measure will threaten manufacturers' ability to protect intellectual property. 

In a statement, NAM Managing VP of Policy Chris Netram said, "The FTC's rule banning noncompete agreements is unprecedented and threatens manufacturers' ability to attract and retain talent. In addition, today's action puts at risk the security of intellectual property and trade secrets—anathema to an industry that accounts for 53% of all private-sector R&D."

According to Netram, a recent NAM survey found that 66% of manufacturers said the ban would interfere with their operations, and about half said it would impact employee training programs. Netram says the regulations may force manufacturers to silo operations, resulting in less cross training, collaboration, innovation and efficiency. 

Yesterday, the Biden administration finalized a new rule to open overtime eligibility. Beginning in July 2024, employers will be required to pay overtime to salaried workers in specific roles who make less than $43,888 a year—the current threshold is $35,568. 

Employers must offer overtime to workers making less than $58,656 by the beginning of 2025. The move is an attempt to help level the playing field for lower-paid salary workers who put in the same hours for less pay than their hourly counterparts. 

Regarding the new overtime regulations, Netram said the rules will only worsen the industry's ongoing workforce crisis. 

"Quarter after quarter, manufacturers cite workforce issues, such as attracting and retaining skilled employees, as their biggest business challenge," Netram said in a statement. He says the new rule "places new constraints on employers, reduces flexibility for the workers who will be reclassified and may force companies to make painful choices that limit both job creation and growth opportunities available to employees."

He adds that the regulation will also complicate efforts to fill current roles as well as the millions the industry is projected to create within the next ten years.

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