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Opening Statement for the Subcommittee on Labor,
Health and Human Services, and Education
Committee on Appropriations
U.S.
Senate
Washington, D.C.
January 20, 2004
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here to discuss a very important issue: The
Department of Labor's efforts to protect the overtime pay of working Americans.
Our job at the Department of Labor is "to make worker protections work."
And this Administration has achieved record results in protecting workers' pay,
benefits and safety. Last year, all across the Department, enforcement was at
record levels. The Wage and Hour Division, for example, collected over $212
million in back wages, including overtime - an 11-year high and an increase of
60% in just two years. We care about protecting workers and we are doing our
job aggressively in the workplace.
One worker protection that currently doesn't work as well as it should
is one of the overtime provisions in the Fair Labor Standards Act: Section
13(a)(1) of the Act, known as the "white collar" regulations.
Overtime is one of the most important rights that American workers have.
But this legal protection has been severely weakened because the Department has
not updated and strengthened its regulations defining the "white collar"
regulations - called Part 541 - in decades.
Today, employees earning only $8,060 per year - that's less than minimum
wage - can be labeled as an "executive" and denied both minimum wage and
overtime pay.
And because the "white collar" duties tests have not been updated for
over 50 years, neither workers, nor employers, nor even many experts in the
field, can tell for certain who is entitled to overtime.
As a result, workers are increasingly forced to resort to the courts and
wait three or four years to recover the overtime pay they are entitled to.
Federal class action lawsuits on "white collar" overtime regulations pay
currently outnumber all employment discrimination class actions combined.
Low-wage workers are being denied overtime. Middle-class workers must
wait through years of expensive litigation to receive their rightful pay.
And if this Department is blocked from giving workers updated, stronger
overtime protections, these workers will pay the price.
They will pay the price by not receiving $897 million a year in overtime
that they deserve. They will pay the price because needless litigation will
divert nearly $2 billion away each year from job creation and better pay and
benefits.
If the rules were clearer, the Department of Labor would be able to
recover back pay for workers within about three months on average - just 108
days.
Everyone recognizes the need to modernize these rules. Reform of the
Part 541 regulations actually began in the Carter Administration. The Wage and
Hour Administrator in the Clinton Administration once said that reforming the
"white collar" regulations was one of two key things on her agenda - and she
added these words:
"But the fact is that four years later neither one of those things got
done while I was there, and I really wanted to fix them.... Here we are now
with a law that needs updating.... it doesn't make any sense to continue to
have legislation that is not working for the majority of employers and
employees."
In a 1999 report to Congress, the General Accounting Office recommended
that "the Secretary of Labor comprehensively review the regulations for the
white-collar exemptions and make necessary changes to better meet the needs of
both employers and employees in the modern work place."
In 1989, recognizing how outdated these regulations have become, Senator
Kennedy co-sponsored legislation to extend the overtime exemption for the first
time to computer systems analysts and software engineers - even if the workers
did not have a college degree and were paid by the hour. That legislation was
adopted in the Senate by unanimous consent.
There is broad agreement that reform is necessary, and using the
regulatory process mandated by Congress, the Department is seeking to restore
and renew the overtime protections intended by the Fair Labor Standards Act.
It's been almost a year since we published our proposal. We have
reviewed thousands of comments about the proposal. We have listened to Members
of Congress. We have heard and appreciated sincere concerns that have been
expressed about this proposal. And we intend to put forward a revised final
rule that is responsible and responsive to the public record.
Let me be plain. The department's overtime proposal:
- Will not eliminate overtime protections for 8 million workers;
- Will not eliminate overtime protections for police officers,
firefighters, paramedics and other first responders;
- Will not eliminate overtime protections for nurses;
- Will not eliminate overtime protections for carpenters, electricians,
mechanics, plumbers, laborers, teamsters, construction workers, production line
workers and other blue-collar employees; and
- Will not affect union workers covered by collective bargaining
agreements.
Claims to the contrary serve only to confuse the public debate, frighten
workers and make them potentially more vulnerable to unscrupulous employers.
The Department's overtime proposal is pro-worker and pro-job creation.
It:
- Will strengthen overtime protections for millions of low-wage and
middle-class workers;
- Will empower workers to understand and insist on their overtime
rights;
- Will enable the Department of Labor to vigorously enforce the law;
- Will prevent unscrupulous employers from playing games with workers'
overtime pay; and
- Will put an end to the lawsuit lottery that is delaying justice for
workers and stifling our economy with billions of dollars in needless
litigation.
America's workers deserve action. Not more studies and delays, but a
fair and balanced rule that responds to the tens of thousands of Americans who
have already told us what they hope to see in a strengthened overtime standard
for white collar workers for our 21st century workforce.
Thank you.
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