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Talk about a
campaign issue! Maybe the White
House is waiting for a retirement announcement at the Supreme Court before
making these plans more public, anticipating lawsuits? - KWC 8 million may lose OT pay NEW YORK (CNN/Money) - More than 8 million workers in the
United States will be ineligible for overtime pay under a plan proposed
recently by the Bush administration, a research group said Thursday. The Economic Policy Institute (EPI), a liberal Washington think tank, examined a proposal by the
Labor Department to change the criteria for paying overtime and found that it
would cost 2.5 million salaried employees and 5.5 million hourly employees
their right to overtime pay. The proposed changes,
which were first introduced in March, will be implemented by the Labor
Department after a "public comment" period, which expires on Monday.
The EPI questioned the appropriateness of the Labor Department's
implementing such sweeping proposals without Congressional approval. "There is no
reason to believe...that Congress has authorized the Department of Labor to
dramatically reduce coverage...taking overtime protection away from millions of
workers," wrote the authors of the study, Ross Eisenbrey and Jared
Bernstein. "Yet that is exactly what the Department of Labor has
proposed." Under current
regulations, established by the Fair Labor Standards Act (FLSA) of 1938, about 79 percent of all workers are
guaranteed the right to overtime pay, or time-and-a-half for every hour worked
above 40 hours in a week. Currently,
there are three tests
for whether or not an employee is ineligible for overtime -- the employee's level of pay, whether
or not the employee is a salaried or hourly worker, and whether or not the
employee performs certain job duties. Under the current
rules, any employee making more than $155 a week -- about $8,000 per year --
could be excluded from overtime, if they had a salary and a job description
that fell into certain categories. The good news is that
the regulations would raise that cut-off amount to $425 a week -- about $22,100
per year -- actually adding about
1.3 million lower-wage workers to the ranks of people eligible for overtime,
according to the Labor Department.
But the EPI
study said that gain is more than erased by the rest of the administration's
plan. For one thing, many
workers earning a salary of more than $65,000 a year will now be excluded from
overtime -- at least 1.3 million workers, according to the EPI study. More critically, the job descriptions of millions of
workers would be moved into certain "administrative,"
"professional" or "executive" categories that would exclude
them from overtime. For example,
"learned professionals" are ineligible for overtime. Under the old rules, "learned
professionals" were only those people who had scientific or specialized
degrees. Now, work experience or technical training can be enough to make a
worker ineligible for overtime. In another example,
"executives" ineligible for overtime, according to the old rules,
were people who hired and fired workers, set wages and assigned work. The new
rules broaden the definition of "executives" to include any workers
who occasionally supervise other workers, even if they spend most of their time
doing manual labor. According to the EPI
study, which used Labor Department and General Accounting Office data about
worker pay and qualifications,
the total effect of the three changes is to exclude at least 8.025 million
workers from overtime --
and probably more, the study said, since the EPI only looked at 78 of the 257 "white collar"
occupations identified by the Labor Department. The proposal could
also cause workers to work longer hours, since the Labor Department doesn't put
any limit on the number of hours per week an employee must work, the group said
in a study published on its Web site.
"Once
employers are not required to pay for overtime work, they will schedule more of
it," the study said. The Bush
administration has said the new rules are clearer and will lower the chance of employee lawsuits. The EPI study said the proposal could
have the opposite effect. "The
proposed rule is rife with ambiguity and new terms...that will spawn new
litigation," the study said. The national labor
organization AFL-CIO said the Labor Department complained that the Labor
Department had stifled
public debate
about the proposed changes. For example,
they said the Labor Department had canceled a union hearing on the issue,
scheduled to take place on June
30 in a Labor
Department auditorium. "The
fact that Labor hasn't held any public hearings on their proposal to cut
overtime pay, and that they have abruptly canceled the union movement's paid
reservation to hold a hearing on the issue, is another sign of the
administration's refusal to permit debate and dissent," AFL-CIO
spokeswoman Kathy Roeder said. "It is a grave disservice to the millions
of workers who stand to lose from the overtime proposal." The White House could
not immediately be reached for comment |
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