- The Washington Times - Saturday, July 19, 2003

Overtime pay matters to millions of working families — from nurses and police officers to firefighters, construction workers and lab technicians. Most of these workers are entitled to overtime now, and their overtime rights will be preserved — or even strengthened — by a U.S. Department of Labor proposal to modernize the eligibility rules for overtime pay. Union members who work under collective bargaining agreements will also come out as well or better under the proposed changes.

But a lot of other workers have not fared so well under the ancient overtime rules — first issued in 1939 — that have remained virtually unchanged since 1949. Recent immigrants, minorities and low-skilled workers are especially harmed because they can be classified as exempt — and denied overtime — if their annual pay exceeds a threshold of just $8,060. It is absurd that a worker can be paid less than the individual federal poverty line and yet be classified as an “executive,” but that is one of the real consequences of these dilapidated rules.

The Labor Department’s proposal would nearly triple the threshold for overtime eligibility to over $22,000, immediately guaranteeing overtime rights for 1.3 million vulnerable, low-wage workers who are currently working more than 40 hours per week.

The department’s plan also provides more clarity for workers and employers concerning which kinds of positions are considered “blue-collar” and entitled to overtime pay, and which are “white-collar” and typically paid on a salary basis. When the overtime rules were first created for a manufacturing-dominated economy, it was a lot easier to tell the difference between managers and rank-and-file employees. Management and labo” worked in different places, wore different clothing and performed very different functions.

Today, many of those distinctions have blurred, yet the government’s classifications of who is and is not entitled to overtime have stayed anachronistically the same. The rules even refer to job titles that no longer exist, such as straw boss, legman and gang leader. As a result, employers can’t reliably determine who is entitled to overtime, and workers don’t have clear standards that would help them defend their rights.

Even worse, this government-nurtured confusion has spawned an explosion of litigation, as workers and employers are drawn into huge class action lawsuits orchestrated by trial lawyers. Many of these suits involve honest mistakes by employers over how our rules should be interpreted, yet verdicts can run into the tens of millions of dollars. Moreover, employees should not have to wait through years of court litigation to recover their overtime pay, while trial attorneys get rich on money that could go to create new jobs.

That’s the other reason why the Department of Labor is advocating these reforms. In the last two years, this administration has built an enforcement record on worker protection that is second to none. In 2002, we fought for and collected a 10-year high of $175 million in back wages on behalf of underpaid workers and brought some of the largest hourly wage cases ever in the department’s history, defending the rights of mostly low-wage immigrant workers.

The existing morass of outdated overtime rules is a hindrance to tough enforcement, not an ally. Clearer and modernized standards for overtime eligibility are not only easier for employers to apply, they are also easier for workers to understand and easier to strongly enforce.

Nearly everyone recognizes the urgent need to reform overtime regulations. Low-wage workers are losing upward of a billion dollars a year in unpaid overtime because of the obsolescent $8,060 overtime threshold. Over half of them are women, 40 percent are minorities and 70 percent have only a high school education or less. Well-intentioned employers can’t figure out the complicated rules, and many workers end up relying on the lawsuit lottery to sort out their overtime rights.

Sadly, workers’ rights have gotten the short end of the stick in past years as Washington interest groups fought a war of attrition against any reasonable overtime changes. Some opponents of reform recently produced a “study” claiming that the Labor department’s proposal would wipe out overtime for millions of workers. In fact, the opposite is true: Our reforms would guarantee overtime pay for 1.3 million workers, make it easier to determine and enforce overtime eligibility for many more and help foster job creation and economic growth.

Last week, the House rebuffed efforts by anti-reformers to protect an indefensible status quo. We need to keep moving forward so we can better protect workers in this ever-changing economy.

Elaine Chao is U.S. secretary of labor.

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