Political Football

Senate Democrats eke out a win for workers. Will the House pull through in overtime?


On Tuesday, Senate Democrats, aided by a handful of moderate Republicans, handed a major rebuff to the Bush administration by blocking a Labor Department plan to scrap overtime pay for many white-collar workers. It’s not clear whether the House will follow suit and, if so, whether the White House will veto the legislation and go ahead with the changes anyway. It’s perfectly clear, though, that overtime has become an election-year political football.

The Labor Department’s changes to overtime are part of a larger overhaul of labor law, the first in 50 years. When first introduced last year, Labor’s changes included broadening overtime coverage for low-paid workers, but cutting back on eligibility of those better paid, as many as 8 million, according to Democrats. Last year’s plan capped rights to overtime at $65,000. But when the Senate voted to block the plan and the House decided to go along, the Labor Department agreed to rewrite the rules.

The Senate on Tuesday was voting on a revised version the rule changes that substantially reduced the number of workers who might lose overtime pay by guaranteeing overtime rights for workers who earn less than $23,660 a year. The new rules would also make those who earn more than $100,000 a year ineligible for overtime.

The Senate voted 52 to 47 for an amendment, tacked onto a corporate tax bill, to scrap the new rules, with five moderate Republicans breaking ranks to prevent the Bush administration from cutting overtime pay. Democrats argued that even under the revised plan, 4 million workers could lose their overtime pay.

Senator Tom Harkin, D-Iowa, who led the charge against the new labor rules, said,

“This was a great victory for American workers and families” and sent a “clear message to the administration” to drop its efforts to rewrite the nation’s overtime pay rules.

Current law, as set out in the 1938 Fair Labor Standards Act, guarantees time-and-a-half overtime pay for those who work beyond the standard 40-hour week. The law makes an exception for white-collar workers — those in executive, administrative and professional positions. But because it’s unclear who qualifies as “executive,” “administrative,” or “professional,” the rules can cause are subject to interpretation. For instance, as the Washington Post points out, “assistant managers could stock shelves, cook food, serve customers and still be “executives” if their “primary duty” is management.”

A former Department of Labor investigator last week told a House committee that this 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.

The issue is especially important in this election year, when workers — from nurses to insurance claim adjusters to restaurant managers — could lose overtime pay. John Kerry did not vote, although aides said he supported Harkin’s amendment.

Labor Secretary Elaine L. Chao maintains that the new rules governing overtime are solid. She says they will strengthen overtime rights for 6.7 million American workers, including 1.3 million low-wage, white-collar workers, who previously didn’t qualify.
Chao said the Senate’s action:

“puts at risk the new, stronger overtime protections for … millions of Americans. As the issue moves to the House, we will continue to expose the misinformation campaign against the rules and strengthen overtime rights for workers.”

Most labor groups are behind the Democrats, including the AFL-CIO
(“It is puzzling that the Administration is pressing forward in defiance of a strong bipartisan majority of Congress. Last year, Congress twice directed the Administration not to take away workers’ overtime rights.”) and the American Federation of Teachers (“Today’s vote is a limited victory for hard-working Americans. The House must now follow the Senate’s lead without delay, as time is quickly running out with the Bush administration’s new overtime rules scheduled to take effect in August. In workplaces across this nation, time clocks are ticking and workers await fairer treatment.”)

But some argue that Labor’s new rules are such an improvement on the status quo that the Senate should have given them a pass. The Orlando Sentinel comments that many more workers will gain than will lose under the new rules :

“Economists and politicians are still studying the details of voluminous new federal rules for overtime pay, but one thing already is clear: The final rules issued last month are a vast improvement over proposed ones issued last year.”

“But Labor Department figures show more workers stand to gain than lose from the changes. Overall, the department says, 1.3 million workers earning less than $23,660 will gain eligibility for overtime, while 107,000 earning more than $100,000 will lose it under the final rules.”

“The new rules aren’t perfect. They would be better, for example, if the range for overtime eligibility were periodically adjusted for inflation. Doubtless some workers and some employers will discover other flaws in the rules.”

The Washington Post writes that the specific problems with overtime could have been fought at a later time:

“Unions and their allies, with some basis for being suspicious of this administration’s attitude toward workers in general and the overtime question in particular, argue that the regulations still would unfairly jeopardize the overtime rights of millions of workers.

If the regulations are inconsistent with the federal law designed to protect the right to overtime pay, they can be challenged in court. And if employers exploit the regulations to unfairly deny overtime pay to workers, they, too, are subject to being sued. In the meantime, the new rules offer some significant benefits for workers.”

The Los Angeles Times suggests that the labor rules are just too confusing, and that they should be sorted out as soon as possible:

“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.

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.”