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News April 18, 2018

In face of labor shortage, employers assign more overtime

Although Bureau of Labor Statistics data shows average weekly overtime hours fell slightly from February to March 2018, employers—especially in the construction, mining and logging industries—are assigning workers extra hours to help handle labor shortages, according to

Employers in these industries have asked their workforces for overtime hours at higher year-over-year rates, with hours increasing as much as 50 percent at some companies. As a result, some workers regularly put in 50- to 60-hour workweeks. Asking workers to work overtime allows employers to maintain current benefits levels in a tight labor market, but the hours cut into profits and cause strain for workers and employers.

Automation is eliminating staffing increases and overtime costs for some companies, but new machinery and software can take as long as six months to activate and requires workers with tech skills to operate them, which can make automation a risky investment.

Employers could see a new overtime rule proposal under the Fair Labor Standards Act (FLSA) in October 2018. Previously, a federal judge invalidated the Obama administration's overtime rule, which would have made workers earning less than $47,476 per year eligible for overtime pay under the FLSA.

Various options exist for companies and industries facing problems finding workers. For example, employers could invest in apprenticeships and reskilling programs, and expanded talent pools and partnerships with local educational institutions could broaden the applicant base and highlight opportunities in these industries.


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