New overtime rules: favoring management?

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http://news.findlaw.com/csmonitor/s/20040726/20040726082439.html

 

New overtime rules: favoring management?

 

By David R. Francis

 

SAN DIEGO - At least 6 million American workers will

lose their right to overtime pay starting Aug. 23.

 

At least that's what Ross Eisenbrey, an economist with

the liberal Economic Policy Institute in Washington,

charges.

 

" It's the worst rollback in employee rights in 57

years, " he says, harking back to the passage of the

Taft-Hartley Act in 1947, a bill that put some

limitations on trade union activities.

 

A Department of Labor (DOL) spokeswoman, Pamela

Groover, calls Mr. Eisenbrey's study and attacks by

the AFL-CIO, the nation's trade union federation,

" misinformation stuff " that " hurts workers. "

 

The DOL states that its new " FairPay " rules " will

strengthen overtime rights for 6.7 million American

workers, including 1.3 million low-wage workers ...

denied overtime under the old rules. "

 

Who's closer to right - Eisenbrey or the DOL - may be

suggested by the fact that almost every business

association in the country is loudly cheering the new

regulations published in April and taking effect in

four weeks. The list includes the 600,000-member

National Federation of Independent Business, the

14,000-member National Association of Manufacturers,

and the 3 million-member United States Chamber of

Commerce.

 

Business clearly expects to benefit from the new

rules.

 

" This rule is an abomination, " says Eisenbrey. Bosses,

he adds, will be able to work more employees 50, even

80, hours in a week without paying time-and-a-half or

anything extra for hours worked beyond 40.

 

Americans already work far longer hours than employees

in most rich nations. The French workweek is by law 35

hours.

 

The rules may only be in effect for a short time. It

depends on whether Congress tackles the overtime issue

again when it reconvenes after Labor Day. Sen. Tom

Harkin (D) of Iowa has an amendment already attached

to a bill involving a tax break for exporters that the

World Trade Organization says is illegal. The

amendment would prevent the Bush administration from

imposing any new regulation that strips workers of

overtime rights. The measure also allows for expansion

of overtime coverage or any other improvements, such

as better job titles, that do not restrict overtime

eligibility.

 

The amendment already passed the Senate 52 to 47 on

May 4, attached to another bill that has so far gone

nowhere. A few Republicans joined the Democrats. With

an election coming up, some Republicans are concerned

about appearing to clip overtime pay, which Senator

Harkin notes accounts for 25 percent of the income of

workers who work overtime.

 

The legislative dance is a bit complicated, involving

a House-Senate legislative conference. But the

Republic leadership is " doing somersaults, " says Kelly

Ross, an AFL-CIO official, to avoid having to vote on

the overtime issue. The labor federation, Mr. Ross

promises, will continue to fight the new DOL overtime

rules in Congress.

 

To Ross, the new rules are another sign that the DOL

" goes out of the way to do bad things for working

people. "

 

Traditionally the Labor Department under any

administration, either Republican or Democratic, has

been regarded as a supporter of workers in the

perpetual conflict between management and labor over

government regulation. The Commerce Department is seen

as the protector of business.

 

But organized labor has taken aim at the Bush

administration's Labor Secretary Elaine Chao for not

taking their side. " We have two secretaries of

Commerce, " AFL-CIO President John Sweeney has

grumbled.

 

A Labor Department fact sheet accuses the AFL-CIO of

" a greater interest in playing politics than in

protecting workers. "

 

Both sides agree on a need to revise overtime

regulations under the Fair Labor Standards Act. The

rules have been unaltered for 30 years despite many

changes in the economy and the labor force. During

that time the salary threshold below which employees

are guaranteed overtime compensation, regardless of

their duties, has remained at $155 a week, or $8,060 a

year, ignoring decades of inflation.

 

For the layman, the 154 pages of new rules in the

Federal Register are almost incomprehensible. It is

difficult to determine, without expertise, whether the

new overtime rules help or hinder workers.

 

They do create a new salary threshold of $455 a week

or $23,660 a year. DOL claims that 1.3 million

salaried workers now earning less than $455 a week

will gain overtime pay. But Eisenbrey maintains that

this DOL analysis is " flawed and demonstrably wrong "

and that only 384,000 of these low-paid workers would

be guaranteed overtime should they work more than 40

hours per week. (To get a total net figure - overtime

losers minus overtime winners - that 384,000 should be

subtracted from Eisenbrey's 6 million estimated

losers.)

 

Recognizing the complexity problem, the AFL-CIO asked

three former Labor Department officials, who worked

under both Republican and Democratic regimes, to

evaluate the new rules. After proclaiming total

independence, the three experts, in 40 pages, offered

damning conclusions.

 

The rules exempt from overtime, they write, a greater

proportion of the workforce than " Congress could have

originally intended. " They remove existing overtime

protection for " large numbers of employees. " They

" failed to restore " an appropriate salary level

requirement, and failed to establish " reasonable and

clear criteria " for determining those not able to

claim overtime, including executives, administrators,

professionals, and outside sales employees. The rules

could result in a " profusion " of court litigation.

 

Worst of all, the three held that the department in

its rules " failed to protect and promote the interests

of working people, " a " core " mission of the DOL.

 

2004 The Christian Science Monitor. All

rights reserved.

 

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