November 14, 2024
Column

DOL’s overtime proposal reeks of ‘bait-and-switch’

The column the Bangor Daily News carried July 17 by Elaine Chao, secretary of the U.S. Department of Labor, reminds me of the “bait-and-switch” tactic used by unethical businesses to ballyhoo one product while insisting that you buy something else when you get to the store.

Thousands of Maine workers are slowly waking up to the importance of the new overtime regulations proposed by the DOL – slowly because there has been a regrettable lack of attention paid to the matter by the media in Maine. Despite Chao stating that the new regulations would both “preserve” and “strengthen” workers’ rights, the fact is that the changes would deprive a net of eight million workers of their overtime – and very likely an even larger number than that would lose out.

The “bait” in the bait-and-switch proposal by DOL is that the change would raise the ceiling under which all workers are entitled to overtime from $155 a week ($170 for professionals) to $425 a week. This part of the current regulations has not been altered since 1975 and there is no doubt that this change is needed. It would entitle (a DOL estimate) 1.3 million more American workers to time-and-a-half pay after 40 hours a week.

The “switch” part comes in the rest of the proposed change.

Under the Fair Labor Standards Act administered by the DOL, some 80 million workers now qualify for overtime pay. Millions of these workers depend on this cash overtime pay to make ends meet. These working families need this money, especially in this current economic recession, to pay bills for child care, prescription drugs and health care and, yes, even for rent and food.

The Economic Policy Institute (EPI) made a study of the issue and estimates that 2.5 million salaried employees and 5.5 million hourly workers will lose their right to overtime pay if the proposed rules are adopted. They estimate, at a minimum, there will be a net of 8 million workers who will get blind- sided by this devious and devastating change and lose the overtime pay they now need and count on getting.

The workers who will lose out include those in dozens and dozens of occupations ranging from cooks and construction workers to firemen and health care professionals.

What is equally disturbing and misleading about Chao’s statement is that she says the proposed measure will provide “more clarity” concerning who is and who is not entitled to overtime pay.

This is like someone from “away” coming to Maine and telling a Maine lobsterman that a week of a pea soup coastal fog will provide “more clarity” in helping him locate his lobster traps.

The truth is that the DOL proposal is a model of obfuscation. Even Harry Potter couldn’t read it and tell you with any certainty who is likely in the end to get overtime. If this change takes effect, a mass of lawsuits is inevitable. However, what we do know with certainty is that no individual employee is going to have the resources to prevail in a lawsuit against Wal-Mart or any other large employer.

Chao says the present regulations have resulted in an “explosion” of litigation. Hey! Read the legal mishmash DOL now has on the table and anyone can see what is coming is a nuclear bomb of litigation that threatens to damage employers, employees and the economy as well.

She says “well-intentioned employers” can’t figure out the present “complicated rules.” This is like telling an employer who is trapped in a maze that he would be much better off in a new, more recently built maze.

The Associated Press in a business analysis story circulated nationwide on July 11 said, “The Bush administration’s proposed new rules on overtime pay raise all kinds of uncertainty about just who should be entitled to extra wages for extra work. The truth is nobody’s sure precisely how many workers will be affected, largely because it’s unclear what employers would do with the increased flexibility provided by rules that are both arcane and broadly worded.”

And The Associated Press went on to note that, “Analysts agree the fuzziness of the rules and employers’ leeway in using them make it difficult to know which workers will be affected. But many say the administration’s estimate of those who will lose out on overtime pay appears to be low.”

How can this be?

Well, just take a look at cooks as an example of just one of literally hundreds of occupations.

If the Department of Labor actually intends that there be no minimum amount of work experience that could qualify an employee as a professional, then one million cooks – rather than the 240,000 included in the EPI overtime loss estimate – could lose their right to overtime pay. Similar effects on dozens of other occupational categories could lead to the exemption of millions of additional employees.

Finally, Chao says the present overtime regulations are “ancient” and have remained “virtually unchanged” since 1949.

In fact, it is the proposed DOL changes which are questionable. Congress has amended the Fair Labor Standards Act many times (most recently in 2000) and has not authorized any changes in the white-collar exemption rules and has not directed the DOL to take overtime protection away from millions of workers.

The Republican-led House voted 213 to 210 on July 10 to defeat a Democratic proposal to stop the proposed regulations and the matter went to the Senate for action. If the change is not blocked in either the House or Senate Maine workers and millions of others could start losing overtime pay as early as the end of this year.

Workers need to read the EPI study easily available on the Internet and they need to make their voices heard before overtime pay vanishes in the misleading Bush/Chao/DOL fog.

Edward Gorham is president of the Maine AFL-CIO.


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