More on overtime reform

Two items in the St. Louis Post-Dispatch on the new overtime regulations (see this post for earlier news stories, links to the regs and explanations).

First, the government’s response to the criticism — an opinion-page piece by Secretary of Labor Elaine L. Chao: “Workers’ Overtime: New rules mean more money, not less”

It’s time to set the record straight about the Labor Department’s new overtime security rules. Contrary to a recent editorial in the Post-Dispatch, the department’s new rules guarantee overtime to more workers than ever before and modernize antiquated guidelines badly in need of reform. . . .

Reporters at the Post Dispatch will be pleased to know that the new rules incorporate protections from current federal court cases and make certain that reporters who are entitled to overtime today will actually get their rightful pay.

The notion that the existing overtime rules “have been working well” may be a trial lawyer’s dream, but it’s not the reality faced by many workers. . . . The rules have become increasingly difficult to understand and enforce, forcing workers to hire lawyers and go to court to get the overtime pay they deserve. . . .

It may be good political rhetoric to claim that the new rules “favor business” and make it easier to “slap a management title on a worker and cut his pay,” but Section 541.2 specifically prevents unscrupulous employers from changing workers’ titles in order to deprive them of overtime. . . .

Even employers acknowledge that they will be required to pay more overtime under the new rules: up to $375 million a year in additional wages. This will cost businesses money, but one employer representative said that most businesses would rather spend money on wages that benefit their employees than spend millions of dollars defending themselves in court, time and time again. . . .Read more

Meanwhile, Congress is again seeking to block the changes. Today’s Post (AP) reports “Senators reject Bush’s overtime regulations”

In an election-year snub of the Bush administration, the Republican-controlled Senate voted Tuesday to require that new Labor Department regulations guarantee the right to overtime pay for all workers who currently qualify.

So, what, we get grandfathering of existing employees, with two employees who are doing the same job being subject to different overtime rules depending on whether they were hired before or after the rules change? That’ll be fun.

The regulations are to take effect in August. Barring a reversal in the administration’s position, critics have several formidable obstacles to overcome to successfully block them.

The Senate’s action took the form of an amendment to corporate tax legislation that has been stalled for months and has yet to clear the House. Moreover, the administration threatened to veto legislation a year ago that would have halted department work on the rules. Read more

Purely political gamesmanship. Why do this as an amendment to stalled legislation if the deadline is impending — Why not force a prompt vote solely on this issue? Who gains from grandstanding on a vote that won’t actually have an impact because the bill never gets out of the House? Who gains from making the President veto this? Why was the vote 52-47, with only five Republicans voting against the regs?

This makes it really fun for employers and the lawyers that represent them. We have to hurry up and learn the new rules (I’m spending my lunch hour tomorrow on an ABA teleconference seminar so I can learn what the nation’s top experts have to say about them), while our clients survey their pay practices and determine what changes to make to comply with them, with full knowledge that they may never come to pass and this may all be wasted effort. How productive is that?

Meanwhile, for those who want to get right to the meat of what the new regs are all about, publisher CCH has a very nice, readable publication in newsletter format: “Department of Labor revises white-collar exemption rules”

Some interesting points include this comment: “Both sides [business and labor] will need to review the final rules in greater depth before registering truly informed opinions either way.” Note this hasn’t stopped them from spouting off vehemently (with truly uninformed opinions)!

An employer “to do” list is included, and the last item is a particularly wise one: “Don’t drop your guard. Employers surely want to believe the rule revisions will ring in a new era of reduced wage-hour litigation. That’s unlikely to be the case. It’s safe to assume that FLSA litigation will be a key weapon in the plaintiff lawyer’s arsenal for at least the near future.”

Amen to that. Read more

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