Chamber favors federal rules for overtime instead of state’s

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BANGOR – A state plan to ensure that workers who are eligible for overtime pay do not lose it under new federal rules may make more people eligible for the extra-hours wage rate.

Just how many more workers could qualify is not known, according to the Maine State Chamber of Commerce, which recently conducted an analysis of the proposed state overtime-protection rules.

But, the Maine chamber added, what also is not known is how many people would lose their overtime pay under the new federal rules – the impetus for writing the proposed state rules in the first place.

The chamber plans to oppose the rule changes during a public hearing that begins at 9:15 a.m. on Wednesday, Oct. 6, in Room 208 of the Cross State Office Building in Augusta.

The state branch of the National Federation of Independent Businesses isn’t pleased about the changes, either.

“Nobody’s going to lose overtime under the federal rules,” David Clough, executive director of the state NFIB, said Tuesday. “Where are the factual documents to form the factual basis for this? I don’t know.”

What’s prompting the state to respond to the new federal rules is a state law enacted in 1995 that says that any changes in federal wage and hour laws, which include overtime pay, should be trumped by Maine’s laws if Maine’s worker protections are more generous.

On Aug. 31, one week after new federal overtime rules were implemented, the Baldacci administration released a four-page list that defines three classifications of workers that typically are not eligible for overtime pay.

The worker classifications – executive, administrative and professional – currently are not extensively defined under state law.

The new federal overtime rules state that if a worker spends any amount of time in a role that can be viewed as supervisory, that worker is not eligible for overtime pay.

Among the proposed state changes, any worker who spends at least 80 percent of his or her time managing or supervising others is exempt from overtime pay. For retail workers, it’s 60 percent.

Also, under the new federal laws, executive, administrative and professional workers would be exempt from overtime pay if they earn $455 or more per week.

Starting Friday, the state pegs that amount at $366.35 – a rate that was established by the state Legislature during its last session and before the overtime rules became an issue.

“Maine employers will have to apply the more generous [$366.35] overtime rules to determine whether those employees are exempt,” stated Portland labor lawyer Eric J. Uhl, who wrote the analysis for the Maine chamber.

The U.S. Department of Labor has estimated that 1.3 million new workers will become eligible for the extra-hours wage rates under the new rules.

But unions and other pro-labor groups say the federal changes make at least 6 million workers ineligible for overtime.

According to the state Department of Labor, no one in Maine should lose their overtime eligibility rights under the new federal laws.

Labor Department spokesman Adam Fisher said Tuesday that he disagrees with the stance taken by the Maine chamber that more workers will become eligible for overtime.

“These changes are not going to add new folks to the coverage list,” Fisher said. “Basically we’re clarifying three terms – executive, professional and administrative. We’re just identifying what those terms are. In the past, we’ve relied on the federal government to do that.”

During the Oct. 6 hearing, the Maine chamber and the NFIB will argue that the state’s implementation of its own overtime protection rules will be burdensome to businesses.

Maine companies that employ people in and out of the state – as well as nationwide companies that employ people in Maine – will have to follow two sets of overtime rules instead of applying one federal standard to all of its employees, according to Peter Gore, senior legislative policy analyst at the Maine chamber.

“From our standpoint, that adds to the cost of doing business here,” he said. “Higher wage and hour costs hurt our competitiveness.”

Gore said smaller businesses – especially those that do not have the expertise to completely understand and apply the state and federal rules – face the risk of lawsuits from employees if they do not follow the rules properly.

What also is bothering the Maine chamber and the state NFIB is that the proposed rule changes are being conducted in a rule-making session and not a legislative session.

Clough of NFIB said typically only technical matters are resolved in rule-making sessions. Substantive policy measures are handled by the Legislature.

“I think it should be a legislative matter because it’s a public policy issue,” Clough said.

Fisher of the Labor Department disagrees. Congress did not vote on the federal overtime rules. They were put into place by the Bush administration.

“That’s what the feds did, and I don’t recall the NFIB fighting that,” he said.