Millions of Americans face a loss of overtime pay under new rules written by the Bush administration. The threat to worker paychecks was too much for some House Republicans, and 22 of them joined their Democratic colleagues in voting to block the rule change. A Senate committee did the same, gaining the votes of two Republican members.
That doesn't mean the rules are dead, however. The full Senate would have to agree and the effort would have to survive a conference committee and a threatened veto by President Bush, who wants to keep the rules in place. It's too early to predict an outcome, but this much is clear _ the new policy favors employers over employees.
For example, a company is able to classify a worker as an "executive" and therefore ineligible for overtime pay even if the worker isn't in charge of anything. That's because the new rules allow the pay status of some workers to be based on the employer's characterization of the job duties. Under the new definition of who is a "professional employee," millions of workers could lose their right to time-and-a-half pay, according to an analysis of the rules by Ross Eisenbrey, vice president of the Economic Policy Institute. That means chefs, technology workers, nursery school teachers and others in a variety of occupations _ in all, 6-million employees _ could end up exempted from overtime protection.
One worker right has been strengthened. Under the old guidelines, employees had to make less than $8,060 to be guaranteed overtime pay for extra work, but now they could make up to $23,659 and still be assured time-and-a-half pay. The House did not try to block that portion of the rules, which should provided the working poor with some protection.
Labor Secretary Elaine Chao said the administration wants to reduce the number of overtime lawsuits against employers by clarifying the rules. And it is true that the wage law, which hasn't been updated since 1949, needs modernization. But this rewrite lacks clarity itself and may make matters worse, according to a study by three former Labor Department officials who worked during Republican and Democratic administrations.
Vagueness in the new rules will have the effect of "encouraging employers to push the boundaries of the new standards," and it will be in many employers' interest "to reduce labor costs by avoiding overtime pay," said John Fraser, Monica Gallagher and Gail Coleman. ". . . The highly desirable results the (Labor) Department expresses its hope to achieve will prove elusive, at great cost to U.S. workers and their families," the authors concluded. While the study was commissionered by the AFL-CIO, a critic of the new rules, the authors say the assessments are their own.
Clearly, the bottom line is this: Under the new rules, more American workers will have to rely on their employer's benevolence when it comes to overtime pay. Congress should finish the job of blocking the rules so that workers don't lose ground.