Dive Brief:
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TJX Companies, parent company of T.J. Maxx, Marshalls, Home Goods and Sierra Trading Co., plans to comply with the The Fair Labor Standards Act overtime rule, despite an emergency injunction from a Texas federal court that last week blocked it, the Boston Business Journal reports.
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The overtime rule, which was scheduled to take effect Dec. 1, was set to raise the salary threshold for overtime pay for most salaried workers from $23,660 to $47,476. The court must still decide to permanently block the measure.
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“At TJX, we attribute our success primarily to the people we have hired over many years who remain focused on our mission of delivering amazing values to consumers,” Thompson told the Boston Business Journal. “With this in mind, TJX will move forward as planned in implementing the changes outlined in Department of Labor's new rules.”
Dive Insight:
With a final decision on the overtime rule still in limbo, many retailers like TJX Companies are making the practical decision to stick to their plans and implement changes that abide by the rule. Proponents of the rule argue that lower paid white collar workers have been working overtime without adequate compensation to bring wages in line with the cost of living.
But trade associations like the NRF hailed the injunction, and are hopeful that the court will tear up the rule, which it described as an "aggressive overreach of executive power." Some retailers are finding other ways around the rule: Wal-Mart Stores Inc. earlier this year announced that it was raising its managers’ base pay so that it was above the new rule’s threshold and therefore moot.
Wages and compensation are among the biggest costs for retailers, yet many experts believe that those who treat that cost as an investment worth making — and pay better wages as a result — tend to enjoy a level of productivity from their employees not found at retailers who treat it as a cost to be minimized. MIT Sloan Business School professor Zeynep Ton and others who have studied the issue have found that when employees are paid more, profits rise, as seen at retailers like Costco, Trader Joe’s and others.
Despite a presidential election that many saw as a stinging challenge to Obama’s progressive labor policies, four states passed ballot measures during the election to raise the minimum wage: Arizona, Colorado, Maine and Washington.
Beyond that, the economy is dictating better compensation from retailers and other employers. For the moment, as wages have risen and unemployment has fallen, retailers will likely have to offer wages and other policies above legal requirements, regardless of what happens to the overtime rule or to various minimum wage laws across the country.