Timeout on Overtime Rule
Overtime pay makes ends meet for many U.S. workers. But the federal regulations that determine who merits overtime are so complex that employers and employees end up in court way too often. Unfortunately, the new Labor Department overtime rule intended to clear things up just makes them murkier. A timeout is called for, if just to figure out who the winners and losers really are.
An earlier version of the new rule drew 80,000 comments from befuddled workers and employers alike. The final rule published in April -- though a clear improvement -- has provoked outright argument about what some of its provisions really mean.
Labor Secretary Elaine L. Chao maintains that, when the rule takes effect in four months, it will guarantee overtime protection to workers earning less than $23,660 a year and strengthen overtime rights for 6.7 million other American workers, including 1.3 million low-wage, white-collar workers who previously didn’t qualify. Workers, though, aren’t taking Chao’s word for it.
Despite Chao’s assurances that she’s worked hard to “get it right,” the National Assn. of Police Organizations determined that “while many police are protected, others are not.”
A former Department of Labor investigator last week told a House committee that ambiguous wording threatens protection now afforded to many workers -- including nursery school teachers, nurses, chefs, team leaders, outside sales people and financial service employees -- who earn from $23,660 to $100,000 a year.
American workers have fueled recent productivity gains but failed to share in the newly created wealth because, as Alan Greenspan recently told the Senate, “virtually all of the gains in productivity ended up in rising profit.”
The economy isn’t spinning off jobs quickly enough to get the unemployed back to work, and young workers are frustrated by a minimum wage that hasn’t budged since 1997. A panic about their overtime is the last thing workers need, even though the regulations surely do need some straightening out.
Rather than take Chao’s word, Congress should order the Labor Department to delay implementation of the complex overtime regulations until everyone knows what really will happen to workers’ paychecks. Get a think tank on the job.
Replacing one flawed set of regulations with another won’t diminish lawsuits and may allow unscrupulous employers to take advantage of more workers. As Chao has noted, key portions of the rule hadn’t been changed in more than 50 years. A few more weeks isn’t going to matter.