AFL-CIO balks at overtime changes
By Brian Tumulty
Gannett News Service
WASHINGTON — The final version of the Labor Department's overtime regulations are generating a new debate about how far the department went in protecting workers.
The AFL-CIO says the final regulations announced last week created a method for employers to take away overtime for some employees, even while new guarantees were put in place for others.
The department issued a six-page response Friday rebutting organized labor's charges.
Q. What's in dispute?
A. According to the scorecard the Labor Department is keeping, the new overtime regulations have 1.3 million winners, and only about 107,000 losers. The larger number represents workers earning less than $455 a week who will gain a new guarantee to overtime pay if they work more than 40 hours. The 107,000 losers are white-collar workers making more than $100,000 annually who stand to lose eligibility.
Organized labor and the liberal-leaning Economic Policy Institute are disputing those estimates, saying certain occupations will receive a blanket exemption from overtime eligibility.
"There are no blanket exemptions in the final rule for any occupations," said Tammy McCutchen, administrator of the Labor Department's Wage and Hour Division. "In some cases, the final rule merely adopts, word for word, the language from current congressionally approved law, and in other cases merely adopts current federal case law. Either way, the status of these workers is unchanged from current law."
Bill Samuel, legislative director of the AFL-CIO, countered, "We actually think buried in the 500 pages, there are workers between $23,000 and $100,000 who will lose pay."
Q. How many workers are currently eligible for overtime?
A. About 87.8 million American workers are eligible, although the majority work 40 hours or less and don't regularly receive premium pay.
Q. What workers are targeted by the changes?
A. White-collar occupations. Blue-collar workers already are clearly eligible for overtime. Construction trade workers, longshoremen and factory assembly line workers are unaffected.
Q. What needs clarification on white-collar jobs?
A. Some courts have held that certain occupations are eligible for overtime, and other judges have ruled the opposite, Labor Department officials say. The current regulations don't offer enough guidance, especially for occupations that didn't exist a couple of decades ago.
"I think (the regulations) can only help, because they are now using terms and examples that relate to the way work is done today," said Ed Potter, president of the Employment Policy Foundation, a Washington think tank. "Will that solve every problem? Absolutely not. But it establishes one-stop shopping."
Q. Is there any chance Congress will stop the regulations?
A. Critics face an uphill battle. Sen. Tom Harkin, D-Iowa, says he will continue to seek Senate passage of legislation that would prevent the regulations from denying overtime eligibility to any worker now protected. It doesn't stop the regulation from taking effect, but would assure that no workers would be harmed.
Q. Doesn't the Labor Department say it is protecting workers?
A. Yes. And it does offer new protections for workers at the lowest end of the pay scale. Current regulations guarantee overtime to workers only if they earn less than $8,060 annually — less than minimum wage for a full-time employee.
The new regulation guaranteeing overtime for all workers earning as much as $455 a week will affect many people in retail occupations, as well as service workers, teachers, designers and even nurses. New language also guarantees overtime eligibility for first responders — police officers, firefighters and other workers critical in an emergency.
Q. Who are the losers?
A. The Economic Policy Institute says specific occupations would be ineligible for overtime, such as restaurant chefs, certain inside sales people, insurance adjusters and funeral directors. In addition, an employee who serves as a team leader can be classified as exempt even if he or she does not have managerial duties.
"Clearly, this is a loophole that will affect a lot of people," said Ross Eisenbrey of the Economic Policy Institute. "This is worse than both the proposed rule and current law. In terms of clarity and avoiding litigation, this one is a nightmare."
Tom Kochan, a professor of management at the Massachusetts Institute of Technology's Sloan School of Management, estimated that as many as 1.5 million team leaders could lose overtime, with the number reaching 2 million if blue-collar and unionized team leaders are included.
"Frankly, I think employers will ignore this, because it's not in their interest," said Kochan, noting that employers are using a team approach to increase productivity and customer service.
In response, the Labor Department said it was strengthening the overtime protections for team leaders.
Q. What do business groups say?
A. Their response has been positive, although retailers and restaurant groups were disappointed to see the guarantee for overtime protection raised to $455 a week from the original proposal of $425 a week.
"We're still taking a look at it to see what it means, but on balance it's a major improvement over what we're living with today," said Katherine Lugar, chairwoman of the OT Coalition, representing business groups that lobbied for an update of the regulations.
