Unions Decry Proposed OT Rule

Organized labor orchestrated a protest on the Labor Department’s front lawn Monday in a last-ditch attempt to block a proposed rule that, according to union officials, would sharply expand the number of workers exempted from receiving overtime pay.

The labor demonstration came on the final day for public comment on a proposed rule published by the Labor Department three months ago. The rule, which the department expects to put into effect by next year, would broaden the definition of workers exempt from overtime pay to include any employee in a “position of responsibility” -- a definition that opponents say too many workers fill.

The Labor Department has focused on another part of the new rule that guarantees overtime status to all workers earning less than $22,100 a year, rather than the current level, unchanged since 1975, of $8,060.

The AFL-CIO and other labor organizations favor that change as a good first step toward shrinking the number of workers not receiving time-and-a-half for overtime. The 1938 Fair Labor Standards Act standardized the 40-hour workweek and required employers to pay workers 50% more for extra hours logged, unless the employee was considered to be an exempted “salaried worker.”

The Labor Department’s proposed regulations would exempt workers with lower education levels, less authority and less independent decision-making discretion than today’s rules exempt.

The liberal Economic Policy Institute estimates that 2.5 million salaried employees and 5.5 million hourly workers would lose overtime pay qualifications if the proposed rules are adopted. The Bush administration, however, said 1.3 million workers between the $8,060 and $22,100 levels would gain automatic overtime pay status.

Unions and their supporters have lined up against the proposed rule. Members of the American Federation of Teachers, United Food and Commercial Workers and the Communications Workers of America joined in demanding that Labor Secretary Elaine Chao withdraw it.

“The Bush administration is basically giving employers a manual on how to lay off workers and force the ones you keep to work double hours,” said AFL-CIO Secretary-Treasurer Richard Trumka, who called the rule “economic poison.”

Tammy McCutchen, administrator of the Labor Department’s wage and hour division, said the rule would “clarify the duties tests to make them easier to understand, and to make it easier for the Department of Labor to enforce the protections. The duties tests were written in 1949, and they don’t reflect the jobs of today.”

Joseph Beachboard, editor in chief of the California Employment Law Letter, said the rule would affect very few California workers.

“You’re talking less than 1% of the workers who are governed by federal law over state law,” said Beachboard, who is also a partner with the Hermosa Beach law firm of Ogletree Deakins. “These changes won’t have a significant impact on them because the California standards are already radically different from the Fair Labor Standards Act. We have more difficult-to-meet duties tests.”

The 1% of Californians the change would affect are federal employees and citizens employed on Indian reservations.

Labor Department officials are reading and evaluating the comments received on the proposed rules. McCutchen estimated that the department would be ready to issue final regulations early next year.

“It is not our intent to take overtime pay away from millions of workers,” McCutchen said. “It is part of the comment process to determine what impact it will have, and we are still deliberating. If we have done something we did not mean to do, we will change the rule.”

Trumka said the AFL-CIO had mobilized 50,000 people to write letters to the Labor Department expressing their opposition.

“But we need more than one-page comments,” McCutchen said. “We are looking forward to reading the more substantive comments, and we will pay attention to them.”

Rep. George Miller (D-Martinez) sent his own letter to Chao on Monday. “Millions who have long depended upon overtime work to help them make ends meet will face effective pay cuts as opportunities to work overtime are diminished,” he wrote.

Miller also sponsored a bill with Rep. Peter T. King (R-N.Y.) that would prevent the Labor secretary from exempting any employee who is not otherwise exempted by law.