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Millions to lose overtime pay

Opinion pieces and speeches by EPI staff and associates.


Millions to lose overtime pay

By  Ross Eisenbrey 

On Aug. 23, the Bush administration will take away the right to receive overtime pay from millions of employees in a broad range of occupations, from office workers in financial services to embalmers, nursery school teachers and restaurant chefs and assistant managers. Despite four disapproving votes in Congress, the Bush administration is using its power and authority to accomplish the biggest rollback in employee rights in more than half a century.

The administration denies it is weakening overtime rights and claims to be taking overtime pay only from workers earning $100,000 a year or more. But the new regulations have their biggest impact on employees earning far less.

Salaried employees earning as little as $24,000 a year (about $5,000 more than the poverty line for a family of four) are subject to the new rules, which make it far easier for employers to deny overtime pay.

It might shock people to think that the government would lie to them, but there is really no nice way to describe the administration’s campaign of disinformation around the new overtime regulations.

Secretary Chao’s spin — that she is only interested in clarity and helping low-wage workers — is totally belied by the regulations themselves. According to three top experts on the Fair Labor Standards, virtually every change in the new regulations will weaken or eliminate the right to overtime pay.

These non-partisan experts are career public servants first appointed in the Reagan administration and include the Department’s top two Fair Labor Standards lawyers for most of the last 20 years and the top career official responsible for enforcing the law during that same period. They also conclude that the new regulations are so confusing and self-contradictory that they will provoke additional court litigation.

Looking only at 10 of the dozens of changes in the law, six million employees will lose the right to overtime pay under the new regulations.

Those hit hardest will be low-level supervisors, who will be classified as ‘‘executives’ by the new rules, even if they spend 90 percent of their time doing the same kind of manual labor or routine office or retail work as the two employees they supervise.

This is a corruption of the original purpose of the Fair Labor Standards Act and its exemptions, by which Congress intended to ensure that all but a narrow class of well-paid top officials and professional employees would get time-and-a-half pay when they work long hours.

The Bush administration has sided with employer groups, who oppose regulation and resent having to pay extra for overtime work. They want the ‘‘flexibility’ to work employees 50 or 60 hours a week without paying any more than they would for 40.

One restaurant chain worked low-paid assistant managers 85 or 90 hours a week without any additional pay, claiming they were ‘‘executives’ and ‘‘in charge,’ even though they spent almost all their time serving customers or running a cash register. The new rules will make that kind of abuse legal.

As we approach Labor Day, founded as part of the original campaign for an eight-hour work day and a 40-hour work week, it is critical to speak out against these new regulations and this weakening of critical rights. Unless Congress can block these regulations this fall, millions will lose overtime pay and find themselves working longer hours.

It took 100 years of struggle to pass the Fair Labor Standards Act and create a 40-hour work week. It has taken the Bush administration less than four years to turn back the clock.

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