Labor and Employment

Policy and Legal

Texas Sues to Block DOL Overtime Rule

Texas has filed suit in an effort to vacate a Biden administration regulation that would make millions more workers eligible for overtime pay (Reuters, subscription).

What’s going on: “Republican Texas Attorney General Ken Paxton in a complaint filed in Sherman, Texas, federal court on Monday said the rule violates federal wage law by basing eligibility for overtime on how much workers are paid rather than the duties they perform.”

  • The expanded rule, released by the Department of Labor in late April, violates states’ constitutional right to structure the pay of state employees and thus how to allocate their budgets, Texas said.
  • Attorneys for the Lone Star State added that the regulation—which the department has said would make about 4 million additional workers eligible for overtime pay—will force states to “eliminate or alter employment relationships and cut or reduce services and programs.”
  • Also on Monday in Texas, software company Flint Avenue filed a suit saying “the rule is arbitrary and capricious, and that the DOL lacked the authority to issue the change” (Bloomberg Law, subscription).

What it would do: The expanded rule drastically bumps up the salary threshold for determining a worker’s overtime pay eligibility.

  • Under it, starting in 2025, most employees making less than $58,656 will be owed time-and-a-half wages when they work more than 40 hours in a single workweek (Bloomberg Law, subscription).
  • The current threshold is about $35,500.

Why it’s important: The new overtime 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,” NAM Managing Vice President of Policy Chris Netram said in April.

  • “This … regulatory hurdle will complicate manufacturers’ efforts to fill the millions of jobs our industry is projected to create within a decade.”
Press Releases

Manufacturers Look to Sheinbaum to Bolster U.S.–Mexico Trade Ties

Washington, D.C. – Following projections that Mexico has elected Claudia Sheinbaum Pardo as its next president, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Today is a historic day for Mexico, and manufacturers across the U.S. are hopeful that President-elect Sheinbaum will continue to work to strengthen our countries’ mutually beneficial trading relationship. Mexico is the U.S.’s second-largest national trading partner, and we look to President-elect Sheinbaum to uphold the rules set forward in the United States–Mexico–Canada Agreement. The USMCA has proven itself as a force for growth, broadening manufacturers’ access to North American markets, leveling the playing field and modernizing rules to promote fair competition, particularly in the 21st-century digital economy.

“We look forward to working with the Sheinbaum administration to ensure continuity under the USMCA and address our shared challenges at the border.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

NAM Files Suit to Block OSHA “Walkaround” Rule

The NAM and allied groups are challenging the U.S. Occupational Safety and Health Administration’s recently finalized “walkaround” rule.

What’s going on: On Tuesday, the NAM, joined by like-minded business organizations, filed a lawsuit in the Western District of Texas to block OSHA’s final rule revising the Worker Walkaround Representative Designation Process. That rule was finalized in April and is set to go into effect May 31.

  • The new rule would allow nonemployees—including union representatives, plaintiffs’ attorneys, community organizers and even competitors—to accompany OSHA inspectors on workplace safety inspections.

Why it’s a problem: Not only does the final rule fail to advance the agency’s mission of ensuring workplace safety, but it is beyond the scope of OSHA’s authority. What’s more, it violates businesses’ rights, the NAM said.

  • The new regulation “infringes on manufacturers’ right to exclude others from their property, threatens new liabilities and risks compromising manufacturers’ intellectual property. The NAM Legal Center is filing suit to prevent this harm,” NAM Chief Legal Officer Linda Kelly said.
Press Releases

Manufacturers Challenge OSHA’s Unlawful Walkaround Rule

The NAM Legal Center Joins Industry Groups Seeking to Block Rule

Washington, D.C. – Today, the National Association of Manufacturers, joined by other business groups, filed suit in the Western District of Texas to challenge the Occupational Safety and Health Administration’s final rule amending the Worker Walkaround Representative Designation Process (Walkaround Rule).

The Walkaround Rule will allow an unlimited number of third parties, such as union representatives, plaintiffs’ attorneys and community organizers, to accompany OSHA inspectors on safety inspections.

“OSHA’s rule does nothing to advance its mission of improving workplace safety,” said NAM Chief Legal Officer Linda Kelly. “This rule is well beyond the scope of OSHA’s authority, and it infringes on manufacturers’ right to exclude others from their property, threatens new liabilities and risks compromising manufacturers’ intellectual property. The NAM Legal Center is filing suit to prevent this harm.”

Background:

  • For more than 50 years, OSHA’s walkaround regulation authorized only an employee of an employer to serve as another employee’s representative during an OSHA inspection.
  • In 2013, then-Deputy Assistant Labor Secretary Richard Fairfax issued a letter—commonly referred to as the Fairfax Memo or Sallman Letter—to a member of the Service Workers International Union, which stated that a nonemployee affiliated with a union or community organization could serve as a representative of employees during an OSHA inspection at a worksite without a collective bargaining agreement.
  • In 2017, a trade group challenged the Fairfax Memo as unlawfully issued outside the notice-and-comment process and inconsistent with OSHA’s regulation that authorized only an employee of an employer to serve as another employee’s representative during an OSHA inspection.
  • A federal court in Texas agreed with the trade group, and the Trump administration later rescinded the memo.
  • In August 2023, OSHA released the proposed Walkaround Rule, and the NAM submitted comments urging OSHA to withdraw it.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

NAM, State Partners Call for Immediate Senate Action on Tax Bill

a large building

The Senate should immediately pass the Tax Relief for American Families and Workers Act, the NAM and its state partners told congressional leaders this week.

What’s going on: The NAM—along with 47 state manufacturing associations—on Monday continued its longtime, ongoing advocacy for the tax bill, which would restore three sector-crucial tax provisions: immediate expensing for domestic research and development expenses, enhanced interest deductibility on business loans and 100% accelerated depreciation for capital investments.

  • “This critical legislation will support the ability of manufacturers in America to create jobs, invest in our businesses, give back to our communities and effectively compete in the global economy,” the groups said.

Why it’s important: If Congress fails to restore these key tax provisions, America’s competitiveness on the world stage will be under threat, they continued.

  • “Without tax policies that encourage R&D and capital investment, countries with more favorable tax systems are capturing job-creating manufacturing investments.”
  • China, for example, provides a 200% “super deduction” for companies’ R&D expenses, which is 10 times more than the U.S. gives. In 2022, the first full year following the expiration of immediate R&D expensing in the U.S., China’s R&D growth was three times that of the U.S.

What’s next: The Senate must not delay, the associations said. Congress must pass the Tax Relief for American Families and Workers Act—now.

The last word: “The breadth and depth of support for these critical, pro-growth tax provisions throughout the manufacturing industry shows the importance of immediate congressional action,” said NAM Vice President of Domestic Policy Charles Crain. “With additional damaging tax increases scheduled for next year, manufacturers cannot afford further delays.”

Press Releases

USTR’s WTO Lead Andrea Durkin to Lead NAM International Policy Team

NAM Advocates Global Trade Strategy That Will Open New Markets with Our Allies and Create Vast Opportunities for Manufacturers in the U.S.

Washington, D.C. – The National Association of Manufacturers announced that former Assistant U.S. Trade Representative for WTO and Multilateral Affairs Andrea Durkin is joining the NAM as the new vice president of international policy.

“Andrea brings a wealth of expertise to the job, with more than three decades of service in both the public and private sectors. As a leader in international trade negotiations, her deep understanding of international policy will enhance the NAM’s strategic objectives significantly as we continue to build off of successful engagements with our counterparts across Europe and the North American continent,” said NAM President and CEO Jay Timmons.

“As manufacturers in America look for new ways to reach global markets and the 95% of customers that live outside the borders of the United States, Andrea is set to lead an ambitious expansion of the NAM’s international policy operation. She will work to uphold our commitment to shaping a global trade strategy that opens new markets with our allies and trading partners around the world, which, in turn, will create vast opportunities for manufacturers in the U.S. to create well-paying jobs, innovate and achieve new milestones in improving the quality of life for everyone.”

Durkin is one of the nation’s foremost experts on international policy, drawing from decades of experience serving in Democratic and Republican administrations. As a senior executive in the Office of the President, she led trade negotiations and U.S. policy at the WTO and was responsible for committees on industrial subsidies, technical barriers to trade, government procurement, trade facilitation, customs and others. She was also the U.S. senior official for the Organization for Economic Co-operation and Development Trade Committee, G7 and G20 trade tracks.

In years prior, Durkin served in the U.S. Department of Commerce’s International Trade Administration, where she led a variety of negotiations, including free trade agreements in the Western Hemisphere, sectoral initiatives in the Asia-Pacific Economic Cooperation and trade-related aspects of United Nations’ multilateral environment and public health agreements.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Press Releases

Manufacturers Call for Comprehensive, Transparent Section 301 Exclusion Process

Administration Must Pursue a Global Strategy To Open New Markets with Allies

Washington, D.C. – Following the Biden administration’s announcement of new 301 tariffs targeting Chinese products in sectors including electric vehicles, solar equipment, semiconductors, batteries, medical equipment and critical minerals, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Manufacturers are concerned about the potential impact this broad swath of tariffs could have on our ability to produce the essential products needed to drive our economy forward, especially if critical inputs become less available and more costly.

“The NAM has long advocated for a full global strategy and a rules-based trading system that benefit manufacturers and workers by opening new markets with our allies. But when countries play by their own rules and create distortions, the U.S. should consider the use of all legislative and enforcement tools.

“The expansion of manufacturers’ global reach through a more open and more fair global trading environment has been pivotal to expanding U.S. industrial production to record levels, enabling businesses of all sizes to raise wages and create more high-skilled U.S. jobs. That is why manufacturers urge the administration to negotiate new trade agreements with allies and partners around the world and create a new, comprehensive and transparent 301 exclusion process to ensure that manufacturing in America is not being disadvantaged by our own government.

“Politicians and policymakers on both sides of the aisle need to understand that we can’t instantly reshape supply chains that took decades to build—especially the supply chains that bring us vital inputs and components essential to our everyday lives.

“Additionally, to fully unleash the power of manufacturing in the United States, policymakers must also ensure that America maintains a competitive tax and regulatory regime that allows manufacturers to ramp up domestic investment; streamline the permitting process so that new facilities and energy and infrastructure projects will not be held up by red tape; grow the manufacturing workforce; and protect innovation. Together, these policies will help manufacturers create jobs, grow wages and expand exports to the 95% of customers who reside outside of our border.”

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Policy and Legal

Manufacturers Participate in Small Business Week Capitol Hill Showcase

a group of people standing next to a man in a suit and tie

Manufacturers were among the select businesses invited to participate in last Wednesday’s Small Business Week showcase on Capitol Hill, and two in particular—Marlin Steel in Baltimore and its affiliated entity, Madsen Steel Wire Products, in Michigan and Indiana—made use of the time with lawmakers to advocate for some manufacturing-critical priorities.

What’s going on: Republicans on the House Small Business Committee hosted the event to shine a spotlight on the work of job creators throughout the country and draw attention to the federal government’s costly regulatory onslaught (Washington Examiner).

  • Marlin Steel and Madsen Steel President and Owner and NAM board member Drew Greenblatt manned a booth with his family at the showcase displaying several products—such as metal baskets and racks—manufactured at his family-owned custom wire and steel products businesses.
  • Greenblatt and others invited to the event had the opportunity to meet and speak with House Republican leaders, including Speaker Mike Johnson (R-LA), Majority Whip Tom Emmer (R-MN), Small Business Committee Chairman Roger Williams (R-TX) and Rep. Tim Walberg (R-MI).

The background: Marlin Steel, Madsen Steel and many other manufacturers thrived under a pro-growth tax provision in the Tax Cuts and Jobs Act of 2017 that allowed businesses to deduct 100% of their R&D costs in the year the costs were incurred.

  • But in 2022 and 2023, that policy and two others—enhanced interest deductibility and 100% accelerated depreciation—expired.
  • Ever since, manufacturers’ tax bills have increased, as companies, including Marlin Steel, have been required to amortize their R&D costs over five years, making innovation-crucial investments much more costly.
  • “We want to grow jobs in our Indiana and Michigan factories, but we also need to give our talent the extraordinary tools needed to compete with China,” Greenblatt said. “We need immediate expensing to cover these huge investments. We put in $5 million but now have to pause investment. We need Congress and the president to act to allow us to hire more factory workers faster.” 

Why it’s important: The showcase gave Greenblatt an opportunity to hammer home to lawmakers the importance to manufacturing of reinstating the expired tax provisions—and the need to act quickly to ensure that an additional suite of pro-growth tax measures, set to expire at the end of 2025, is extended.

  • Another issue top of mind for Greenblatt and manufacturers everywhere is the flurry of regulations being handed down by federal agencies.
  • In 2022, the cost of federal regulations to manufacturers was approximately $350 billion, a 35% increase from a decade earlier, according to an NAM study.
  • Small manufacturers spend more than $50,000 per employee per year to comply with federal regulations. 

Stop the struggle: “As a small business owner myself, I know all too well the many struggles small businesses face when trying to compete in the marketplace,” Chairman Williams said. “It is my hope that this … showcase serve[s] as an opportunity for more to learn about how invaluable Main Street is to our economy and our country.”

Related: Last week, the NAM unveiled videos on social media from other leading small and medium-sized manufacturers, adding their voices to key competitiveness priorities, featuring NAM board members Patricia Miller, CEO and founder of M4 Factory, Charles Sukup, chairman and treasurer, Sukup Manufacturing Co., and Nicole Wolter, president and CEO, HM Manufacturing.

Workforce

Manufacturing Employment Stays the Same

Employment in manufacturing remained essentially the same in April as it was in March, according to data out today from the U.S. Bureau of Labor Statistics.

  • Overall employment increased by 175,000.

What’s going on: Manufacturing employed a seasonally adjusted 12,961,000 workers in April, up just marginally from 12,953,000 in March and 12,957,000 in February.

  • The number of people employed in manufacturing was also up only slightly from April 2023, when it was a seasonally adjusted 12,941,000.

Durable goods vs. nondurable: There were a seasonally adjusted 8,144,000 workers in durable goods manufacturing in April, flat from March’s number.

  • Nondurable goods had a seasonally adjusted 4,817,000 employees, also essentially unchanged from the prior month.

Workweek: The average workweek in the manufacturing industry was unchanged from March, at 40.0 hours.

  • In the larger economy, the workweek for all nonfarm employees inched down by 0.1 hour in April, to 34.3 hours.

​​​​​​​Earnings: Average earnings in manufacturing were also little changed from March to April, coming in at $33.61 an hour in the latest reading, down only slightly from $33.65, but up from February’s $33.44.

Policy and Legal

NAM and Allies: PM2.5 Standard Will Hurt Manufacturers, Economy

The EPA’s overly stringent final rule on particulate matter puts continued U.S. innovation and economic growth in jeopardy, the NAM and allied groups told congressional leaders Monday.

What’s going on: In March, the EPA lowered the standard for particulate matter, or PM2.5, in its National Ambient Air Quality Standards rule by 25%, down from 12 micrograms per cubic meter of air to nine.

  • This week, the NAM, along with 58 allied organizations, urged key House and Senate members to act soon to “stop this harmful rule before it takes effect.”

​​​​​​​Why it’s important: The probable negative effects of allowing the change include “making it more difficult to create jobs, build cutting-edge factories and lead the world in the development of products that will shape modern life in the decades ahead,” the groups said.

  • Compliance costs could exceed $1.8 billion, according to the agency’s own estimates.
  • The lowered limit also puts the U.S. at a great disadvantage to global competitors, which “have adopted standards that are less stringent than the EPA rule and are phased in over a much longer time frame.”

What needs to happen: Congress should pass a resolution of disapproval regarding the new standard immediately.

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