OVERTIME RULES
September 1, 2003

The Labor Department is proposing the most dramatic changes to the Fair Labor Standards Act in 65 years. The changes would raise the minimum amount people can earn and still be paid overtime but would also allow companies to stop paying overtime for some workers who are currently eligible.Background report.

 

July 29, 2003: A look at why the official unemployment rate is lower than the actual number of jobless citizens. June 23, 2003: How the loss of manufacturing jobs have impacted those who used to work in the industry June 6, 2003: Paul Solman looks at how today's recent college graduates are fairing in the job market. Dec. 20, 2002: The experiences of the working poor and how they are reflected in a play. More NewsHour coverage of the economy and Congress   News for Students: What effects are a sluggish economy having on students?     The Labor Department The AFL-CIO	JEFFREY BROWN: Now to our own debate of the new rules. Victoria Lipnic is assistant secretary of labor for employment standards; Richard Trumka is secretary treasurer of the AFL-CIO, the labor organization that represents 13 million workers. Welcome to you both. Ms. Lipnic, what is the problem that these new rules are intended to fix? VICTORIA LIPNIC: Well, the problem the new rules are intended to fix is to restore overtime protection to millions of workers who are currently being denied it -- and we're talking about white collar workers -- because the regulations that are currently on the books have not been changed in about 54 years and are significantly out of date and complex and in great need of updating. So we would like to restore overtime protection to people who should be getting it under the law but currently are not. JEFFREY BROWN: So at the lower end, this will... more workers will qualify for overtime. At the higher end of the income scale clarifying who qualifies will do what? VICTORIA LIPNIC: Well, at the lower end it's definitely true that more people will qualify for overtime, and our analysis tells us that an additional 1.3 million low-wage workers will automatically be guaranteed overtime under these proposals, and that is definitely necessary because the passing of time has left millions of people behind. At the high end, when we make some changes to some of the other tests in the regulations, there is a possibility that some people could lose overtime protection but our intent is to simplify and clarify and put some greater certainty into the law so that ultimately those of us at the Labor Department can enforce the law better and so employees will know their rights and so that employers will know how to pay people correctly.
	New, simplified overtime rules
	JEFFREY BROWN: So, Richard Trumka, what is wrong with simplifying, clarifying the rules? RICHARD TRUMKA: Well, they're going to make certain the rules are right. But they're going to take 8 million people who currently get overtime and deny them overtime. If their goal is to give more people overtime, these regulations fail miserably. Two ways: she's right -- that at the bottom of the scale by raising up the minimum level that people automatically qualify for it; that's the good thing. But they should have gone all the way up to $27,000 instead of where they stopped because that's where the bottom would have been if it had been in there. Second of all, by putting a cap on it at $65,000 they're virtually certain that anybody who makes over $65,000 is going to be denied overtime. So if their goal is to get more people covered for overtime, then they failed miserably. If their goal is certainty, they've achieved it because people will certainly not get overtime when these rules are passed. JEFFREY BROWN: Mr. Trumka, there is clearly a difference in the numbers of potential people affected. Who do you think -- which workers do you think would be impacted by this? RICHARD TRUMKA: There will be scores of workers impacted, cooks, nurses, engineers, computer programmers, technicians, journalists, camera people, camera techs; there will be scores of people that will be denied overtime that currently get it. Victoria said that they wanted certainty -- they used words like administrative or executive duties -- I mean, their own spokesman said this was going to cause a deluge of litigation. The rules are pretty well understood right now -- people that understand and get overtime generally know how to get it and the Department of Labor up until now hasn't had a problem administering that. With these new rules there will be some certainty, all right -- people certainly won't get it but there'll be a deluge of litigation over those 256 categories that we're talking about right now.
	Will new rules lead to more litigation?
	JEFFREY BROWN: And, Ms. Lipnic, there has been a lot of litigation already in this area but he's saying -- opponents say that there will be even more -- VICTORIA LIPNIC: Well, let's talk first about all the litigation that's been going on and what Mr. Trumka just said about the Department of Labor has no problems in administering these rules. That's not the case. At the Department of Labor the wage and hour division, which administers these regulations, has tremendous difficulty in applying them because they are not particularly applicable, nor are they particularly relevant to the workforce today, so it is not true that the current regulations that are on the books are so certain and so clear. In fact, they are enormously ambiguous. They are not relevant to the workforce today, and, unfortunately, we've got two tests on the books, one of which has been completely obsolete for 15 years. It serves no useful purpose whatsoever in determining which white collar workers will get overtime. A second point to come back to, Mr. Trumka's contention that 8 million workers are going to lose overtime. Any number of those workers that he -- the jobs and particular applications that he talked about, nurses, first responders, all of those are people who have overtime protection today and will continue to have overtime protection today under our proposal. Nurses are a perfect example of that. We have not changed the exemption as to nurses in any way. I think that the lack of clarity and the ambiguity associated with the current rules is a problem for everyone, and it is leaving many people behind, many white collar workers who should be getting overtime. We'd like to restore that and put that into place for people. JEFFREY BROWN: Mr. Trumka, in fact, as I understand it, the changes would not affect workers who are covered by union contracts. RICHARD TRUMKA: Well, first of all, it may or may not. Here's the reason. First of all, we represent -- we like to speak for all workers, whether they're union or non-union, and when we believe 8 million workers are going to be denied overtime by a rule change, that they say is simply seeking clarity, we think that's bad; it's bad for those 8 million workers, but it's also bad for the economy. Second of all it could affect union workers -- although it may not certainly do it. Some union contracts say that overtime will be paid in accordance with applicable law. If applicable law changes, then they won't get their overtime. The new rules that they tried to put in or they will put in has an upper limit. After $65,000, and Victoria just agreed that some people may lose that, we think virtually all of them will after $65,000 that are currently getting overtime; those people will also lose the overtime benefits. A lot of those are our members, a lot of them aren't, but again it's bad for working families, union or non-union, and it's bad for the economy.
	The upcoming fight in Congress
	JEFFREY BROWN: Ms. Lipnic, this is clearly one of the fears among opponents is that the rules will spread to more workers than you have intended. Is there any way you can control that? VICTORIA LIPNIC: Well, first of all, the rules in and of themselves only apply to white collar workers, so we're talking about a limited pool of the overall workforce who these rules apply to. We're not talking about everyone who earns overtime in this country. We're not talking about people who are in blue collar jobs. Eleven million people earned overtime last year. Many of those -- most of those will continue to earn overtime under our changes and our proposal. I think it's important to keep in mind the one thing that many people are missing is the fact that the current rules, because they are so out of date, many people are being left behind today. People in many ways don't know what they're missing because they can be easily mis-classified today and be exempted from overtime. We'd like to ensure that that cannot be the case, and we think it is long overdue for these changes for the white collar worker. JEFFREY BROWN: And, Mr. Trumka, briefly, this is now a political fight. What do you expect to happen when Congress comes back? RICHARD TRUMKA: Well, I think we're going to get an amendment that's going to prohibit the Department of Labor from writing regulations that will reduce the overtime for workers out there. If Victoria is right and these rules will only increase overtime and everything is going to be great between us in supporting the amendment because the amendment that we think will go on the floor we think will ultimately pass, the Harkin amendment, will say that the Department of Labor is prohibited from promulgating rules that will reduce overtime for existing people. If she's right, she ought to join us in that amendment, and we all win. JEFFREY BROWN: And, Ms. Lipnic, this kind of change has been attempted many times before and never happened. Do you think it's going to happen this time? VICTORIA LIPNIC: Well, we certainly hope that that's the case. One of the things that Mr. Trumka mentioned in terms of the congressional debate that may happen, we think it would be terribly unfortunate if the Department of Labor and the administration is stopped in this process when we are really in essence in the middle of a rule making process. The Department has received some 70,000 comments. All of those comments will help us and inform our ultimate decision making and what we fully expect is that those comments will allow us to put better rules into place that will benefit more workers. That's our goal. JEFFREY BROWN: Okay. Victoria Lipnic and Richard Trumka, thank you both for joining us. VICTORIA LIPNIC: Thank you. RICHARD TRUMKA: Thank you.

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