The National Retail Federation has warned that Obama’s plan to make more people eligible for overtime would drive up payroll and impact new jobs.
The Obama administration is proposing that all salaried workers who earn less than $50,440 (£32,389) per-year would be eligible for overtime if they work more than 40 hours in a week.
Currently, salaried workers who earn more than $23,660 (£15,189) per year are not eligible for overtime.
The proposed rule governing could impact up to five million workers, the Obama administration officials said on Tuesday.
However, the National Retail Federation (NRF) has come out against the proposed rules, claiming the it would force employers to reduce overtime hours and potentially axe roles.
In a statement on its website, the NRF said it was “opposed to the proposal”, adding that the industry is concerned “because the expected change in wage levels could bring many store managers or assistant managers under overtime rules, taking away their ability to use their own discretion in deciding whether to put in the extra hours sometimes needed to do their jobs.”
It pointed to a recent NRF survey which found that the majority of store managers oppose overtime expansion, with 75% saying it would diminish the effectiveness of training and hinder their ability to lead by example.
The NRF highlighted another of its studies which found that expanded overtime wold encourage retailers to limit hours or reduce base pay to compensate for the extra costs
The NRF said: “Overtime expansion would upset that well-established system, add to employers’ costs, undermine customer service, hinder productivity, generate more litigation opportunities for trial lawyers and ultimately harm job creation.”