Commentary | Trade and Globalization

Saying goodbye to overtime checks

Opinion pieces and speeches by EPI staff and associates.


Saying goodbye to overtime checks

By  Ross Eisenbrey

Any day now, the Bush administration will issue new rules that could deprive more than 8 million American workers of overtime pay. When it does, expect more talk about how the rules are good for workers.

Don’t believe it. The administration’s claims about its overtime rules haven’t been any more reliable than its predictions about job creation or Medicare costs. The ones who will reap the benefits of these new rules are not working Americans but their employers.

The new rules will make it much easier for employers to reclassify workers as managers or administrators, making them ineligible for time-and-a-half pay when they work more than 40 hours in a week. The Department of Labor claims that only 644,000 workers will lose overtime pay, but their own data show what a gross underestimate that is. When you factor in all the workers whose jobs could be reclassified, it’s not 644,000 who will lose out–already far too many–but 12 times that many.

The administration rolled over a bipartisan congressional vote last year to rescind the changes and uphold overtime protections. Special-interest politics won a stunning victory that left us with rules that deny overtime, rather than protecting or expanding it, and officials who disown the consequences of their actions.

The department’s controversial approach has been to propose changes to the law while simultaneously claiming not to change it. For example, the proposal gives employers a new way to deny workers any overtime pay, just by labeling them “professional” regardless of their educational background. Instead of, say, using a four-year college degree as a benchmark, the department allows “work experience” to substitute for academic education. So employers could deny overtime pay to “professional” employees with only an associate’s degree or no degree at all. The department both confirms and denies this impact. While its own analysis admits that this change could eliminate overtime pay for hundreds of thousands of employees, the department insists it is making “no substantive changes to the current rules regarding educational requirements for exempt professionals.”

Other denials are even more brazen. The proposed rule adds “training in the armed forces” as a route to no-overtime “professional” status without a college degree. Labor Secretary Elaine Chao misled lawmakers by claiming that “nothing in the current or proposed regulation makes any mention of veteran status.” She’s right only about the current regulation. The new rules, however, will make many workers with armed forces training exempt from overtime pay, despite Chao’s claim.

Curiously, the Bush administration refuses to back away from its patently false estimate that 1.3 million low-income employees would gain overtime rights under the Bush plan. It is true that the administration’s proposed adjustment to the salary level for guaranteed overtime coverage–from $8,060 to $22,100–would extend overtime coverage to some number of low-wage managers. But nothing close to 1.3 million workers earning less than $22,100 are legitimately denied pay for the overtime they work under current law, and the Bush administration knows it. The administration’s estimate includes 600,000 blue-collar workers who are already eligible under current rules and will gain nothing from the Bush plan. Yet Labor Secretary Chao continues to cite this erroneous figure to distract attention from the administration’s proposed overtime cuts.

One thing about the rule is certain: Workers will lose overtime coverage they now have. There is no other reason for the Bush administration’s adamant opposition to legislation in Congress that permits overtime changes that are neutral or expand coverage, but blocks any changes that result in the elimination of overtime rights.

The administration’s claims for its new overtime rule bring to mind another dubious claim, the one about how shipping high-skill, white-collar jobs overseas is actually good for us. Given the sorry track record, it’s wise to take anything the administration says about jobs with lots of salt.

Ross Eisenbrey is vice president and policy director of the Economic Policy Institute in Washington, D.C.


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