If you believe Bush officials, his Labor Department’s new overtime regulations are “fair-pay rules” that “strengthen overtime protections.”

But if you believe two new studies, the rules strengthen protections all right: For businesses, not for workers.

Bush’s Labor Department, both studies say, is flat-out wrong in the figures it uses about how many workers will be helped, or hurt, by the rules.

The studies are by the labor-backed Economic Policy Institute and by three former top Labor Department wage and hour division officials, who were commissioned by the AFL-CIO. They come at an important point in the fight over workers’ overtime eligibility.

Congressional Democrats, backed by the federation and other groups, are mounting yet another effort to halt the new rules, now scheduled to take effect just before Labor Day, on Aug. 23.

EPI details how, within a month, at least six million workers could lose overtime pay they now receive. “Almost every one of these changes will weaken the rights of employees to earn overtime pay,” says EPI Vice President and economist Ross Eisenbrey, its author. “This is the most significant rollback in employee rights in the last 50 years. The Labor Department is not responding to the needs of workers. It’s responding to the demands of employers.”

The second study, by the three former DOL officials, says the new overtime rules overwhelmingly weaken protections for workers. In fact, it says, the rules vastly expand the number of workers to whom businesses can refuse to pay overtime.

Using the department’s own statistics, this study calculates the new rules could deny overtime eligibility to 40 percent of the U.S. workforce, compared with 15 percent today.

Study authors Gail Coleman, John Fraser, and Monica Gallagher say updating the rules is absolutely necessary. But they also warn that: ” ‘Doing something’ should not mean that doing anything is acceptable.” They conclude: “Implementation of these new regulations will harm rather than promote and protect the interests of U.S. workers and their families.”

These assessments are the exact opposite of Bush Labor Department claims that the new rules “will strengthen overtime rights for 6.7 million American workers.”

The agency claims the new rules will directly benefit “1.3 million low-wage workers who were denied overtime under the old rules.” Eisenbrey calls that “wildly inflated.” He calculates only 400,000 more workers who don’t get overtime now will do so.

Labor Department spokesman Ed Frank told the Kansas City Star the studies are “a rehash of misinformation put out by the AFL-CIO and its allies.” He continued to insist: “Millions of workers will benefit from the strong new overtime guarantees.”

The conflicting claims surround revised rules under the Fair Labor Standards Act.
The changes will take effect unless Congress successfully blocks them. Bush previously threatened to veto one bill with a provision blocking the rules, but congressional GOP leaders dumped the Democrats’ overtime pay protection plan before sending the bill to the White House.

House GOP leaders have also prevented votes on acts to block the new rules, when Democrats tried to bring the issue up.

The Bush Labor Department’s new rules do three basic things:

*Require that workers who make less than $455 a week to receive overtime pay when working more than 40 hours in a week.

* Rewrite guidelines, or duties tests, under which employees can be denied overtime if their company can classify them as “executive,” “administrative” or “professional.”

* Automatically deny overtime to most employees making at least $100,000 a year. Requiring overtime pay for virtually any worker making less than $455 a week – roughly $11.37 an hour – is about the only change that benefits workers, both studies say.
That replaces the current level – $155 a week for most workers – in place since 1975.

But the $455 figure is not indexed to inflation, EPI’s Eisenbrey points out. That means, as the years go by, fewer and fewer workers will qualify under this rule.

On the other end, the $100,000 threshold isn’t indexed for inflation either, so more and more workers will make more than that figure as years go by. And as “highly compensated employees” it almost guarantees these workers will lose overtime pay, Eisenbrey says. That’s because their jobs have to include only a single duty that can classify them as “executive,” “administrative” or “professional.”

By Michael Kuchta
The St. Paul Union Advocate
Special to PAI