Columns

Tuesday, August 24, 2004

overtime work deserves overtime pay

On Labor Day, Iowans will celebrate the dignity of work and the achievements of the American labor movement. But, this year, Labor Day brings a negative note. On August 23, the new federal regulations governing eligibility for time-and-a-half overtime pay went into effect. And these new rules will deprive millions of Americans of their right to time-and-a-half overtime compensation.

Since passage of the Fair Labor Standards Act in 1938, overtime rights and the 40-hour workweek have been sacrosanct – respected by administrations of both parties. But that trust has now been broken. The new rule makes it easier for employers to deny overtime pay. And this, in turn, will hurt job creation.

If employers can more easily deny overtime pay, some will simply push their current employees to work longer hours without compensation. Workers without overtime rights are twice as likely to work more than 40 hours a week. With millions of Americans out of work, why give employers a major new disincentive to hire new workers?

Last month, a study by the Economic Policy Institute (EPI) concluded that at least six million U.S. workers will lose their right to overtime under the final rule. EPI estimates that some 1.4 million workers earning as little as $23,660 will be reclassified as “executive” employees ineligible for overtime, even though they do little supervision and a great deal of manual or routine work. For example, an assistant manager at a McDonald’s franchise who spends most of his or her time flipping burgers or filling orders, but spends, say, 10 percent of the time performing supervisory duties, could be ruled ineligible for overtime.

Many people today work no more than 40 hours a week. So, they think the new rule does not affect them. However, under the new rule, they can now be “reclassified” and required to work more than 40 hours a week with no time-and-a-half overtime pay. The stakes for workers – and for our economy – are high. Bear in mind that time-and-a-half pay accounts for about 25 percent of the total income of Americans who work overtime. With average incomes declining and our consumer-driven economy still shaky, the proposed changes would slash the paychecks of millions or workers.

I believe that the new rule on overtime eligibility is a mistake. And I have been pushing legislation in Congress to block it. We face an uphill battle to roll back the new rule. But I am committed to sustaining this fight for as long as it takes.

On Labor Day – and every day of the year – we should value work, not devalue it. If employers oblige their workers to give up premium time with family and friends, then those workers deserve premium pay. That’s what time-and-a-half overtime pay is all about. It shouldn’t be taken away.