Most workers who will lose money under the new Bush overtime provisions will at least get a new title.

One result of the new rules, predicts Economic Policy Institute Vice President Ross Eisenbrey, “is that there will be an “explosion of ‘executives’ ” in the U.S. workforce.

The new rules set up all kinds of guidelines to help companies determine whether jobs paying between $23,600 and $100,000 are exempt from time-and-a-half pay under the “executive,” “administrative” or “professional” categories.

Those are the areas, said Sen. Tom Harkin, (D-Iowa), where a worker who toils say, for 95 percent of the time as a worker and 5 percent as a manager – at a McDonald’s, for example – can’t get overtime under the new federal rules.

Of course, it won’t be executives as most people understand the term – suit-and-tie types in corporate offices. Instead, workers who supervise as few as two co-workers, such as a shift manager in the toy department of a Wal-Mart, could be reclassified as “executive” and lose overtime eligibility, Eisenbrey says.

There’s more. Firms can exempt more than one “executive” for the same workers, as long as they maintain a 2:1 ratio of exempt (executive) and non-exempt employees. Supervising doesn’t have to include the ability to hire and fire, or even take up the majority of the “executive’s” time, under the new rules.

“You can spend virtually all day serving customers, sweeping the floor, or doing the same things your co-workers do and still be exempt,” Eisenbrey says.

Similarly, the new rules create a broad new exemption called “team leader” that can exclude workers from overtime pay as “administrators.” Eisenbrey calls this “a huge loophole.”

Team leaders who have “no supervisory authority at all” still can be exempt and denied overtime, he says. Exemptions for “professional” employees also expand so that, in some cases, workers who have only a high-school education, not a college degree, can lose overtime pay eligibility.

Workers covered by union contracts do not lose overtime eligibility, but once their contract expires, they will have to successfully renegotiate to keep their overtime rights, Eisenbrey says. In the meantime, he says, “You don’t have federal law behind you.”

The AFL-CIO also criticizes the Labor Department for writing “rules that are vague and internally inconsistent” and failing to achieve its own stated goals to “simplify, clarify and better organize the regulations.”

The study’s authors – who all worked in the agency division that enforced pay and overtime regulations – predict the rules “will likely result in greater confusion and profusion of litigation – outcomes the department explicitly sought to avoid.”

“Ambiguity will almost never favor employees, and will almost always favor employers,” Eisenbrey said, adding that because the Bush Labor Department fails to define many key terms and makes minor changes in many of the definitions it does provide, decades of case law no longer directly apply, he says.

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