The Building Tradesman Newspaper

Friday, September 17, 2004

Union employers gain 'a powerful bargaining chip' with OT rules

By The Building Tradesman

On paper, the House voted on Sept. 9 to bar the new overtime rules from going into effect.

In reality, the rules have been in effect, as of Aug. 23. President Bush circumvented previous congressional votes that barred the overtime rules and used his Executive Branch powers to make certain they went into effect, anyway.

Getting the rules completely overturned is hardly a slam dunk. So what can workers expect? The devil is in the details of the new rules.

“The sweeping changes to the Fair Labor Standards Act governing overtime that took effect last month are having unexpected consequences among anxious workers,” reported the Wall Street Journal on Sept. 7, two days before the House vote. “They are causing many to consider switching employers, seek demotions, or ponder how to battle management during contract negotiations.”

The new rules allow workers to be reclassified as “supervisors” or “executives,” so employers can avoid paying them overtime.

One of those potential new “executives” that the Wall Street Journal used as an example is Patrick Brower, who inspects highway construction work for MIOSHA. The Journal said he is classified as a “team leader,” a position that will likely make him ineligible for overtime protection under new federal rules. He may lose his right to overtime – and he has worked more than 300 hours of overtime so far this year.

The Bush Administration pushed the new policy as a means to update 70-year-old labor law and reduce litigation with the new language. In reality, the Journal said early signs indicate that “lawsuits over wages and hours continue to rise” although mostly on the state level, and litigation may increase because employees will be testing the new rules in the courts.

Other consequences include workers like nurses considering changing jobs in order to keep overtime, or seeking demotions. Organized labor and its allies see the new rules simply as a way to save employers money by denying workers overtime.

Union members have been assured that they will be unaffected by the new rules, because collectively bargained pay scales trump the federal guidelines. Ominously, the Journal said Brower will find out more about his status this fall, when his union contract comes up for re-negotiation.

So what do building trades and other union members need to know about the new rules? “As they gird for coming negotiations, some union leaders expect employers to wield overtime eligibility as a powerful bargaining chip,” the Wall Street Journalsaid.

It may take awhile for employers to drag the new rules onto the bargaining table – but it’s almost inevitable, said Dr. Dale Belman, associate professor with Michigan State University’s School of Labor and Industrial Relations. He said the loss of overtime rights in the unionized sector “won’t be like falling over a cliff. It will be similar to the way union membership has dropped over the years – 10,000 here, 20,000 here. Nonunion workers will be affected first, and that will create market pressure on the union side. Few employers are going to want to anger their employees by taking away overtime, but new employees will eventually be reclassified. The pressure on unions will increase gradually.”

The Journal article suggested that initially, employers may say they won’t ask employees for health care reductions, but they do want to be able to eliminate overtime.

Clues as to who may first be affected in the nonunion construction sector are provided by AFL-CIO attorney Baldwin Robertson.

“Workers who perform manual work exclusively are entitled to overtime pay under current rules and will continue to be under the new Bush rules,” Robertson said. “But the blue-collar workers who will be more vulnerable under the new Bush rules are those who perform some combination of manual work and supervisory work, such as working foremen or working supervisors, as well as those who perform some combination of manual work and administrative work or “team leader” responsibilities.

“Blue-collar workers who work outside the employer’s place of business, such as repair persons who perform some sales work or could be assigned some sales work, will also be vulnerable. The Bush administration has added a new provision that pretends to protect ‘blue collars’ but does not address any of the situations in which blue-collar workers are likely to be affected by the new regulations.”