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ESA News Release: [05/04/2004]
Contact Name: Lisa Kruska
Phone Number: (202) 693-4676

Wage & Hour Division Administrator Testifies: Harkin Amendment Will Put OT Protections at Risk for Millions

WASHINGTON—U.S. Wage and House Division Administrator Tammy McCutchen today told a Senate subcommittee that the Labor Department’s new overtime security rules will strengthen and guarantee overtime pay protection for 6.7 million additional workers.

McCutchen also testified that a proposed amendment by U.S. Sen. Tom Harkin to block the new rules “raises many questions and will put overtime protections for millions of employees at risk.” In her testimony before the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education, McCutchen posed a number of the questions she said would put workers at risk.

“How would we determine which sections, paragraphs or even sentences were still in effect should the amendment pass?” McCutchen asked. “How would the amendment affect the last 50 years of federal case law, wage-and-hour opinion letters and the wage-and-hour field operations handbook—which are not reflected in the current regulations? Would all or some of these still have the force of law?

“Will new employees be subject to a different set of rules? What rules would apply to an employee who changes employers but performs the same work? It appears that the amendment could result in different employees who perform the same work for the same employer being paid differently—and that could create other legal issues.

“In short, we have opposed the amendment because we do not know what the law would be—for any employee—if the amendment is passed,” McCutchen said. “We do know it would add confusion and double the litigation. The amendment would make our enforcement more difficult because each case would require two determinations instead of one: was the employee exempt under the current regulations, and whether the employee is exempt under the final regulations.”

The new rules expand the number of workers eligible for overtime by nearly tripling the salary threshold. Under the 50-year-old regulations, only workers earning less than $8,060 annually were guaranteed overtime. Under the new rules, workers earning $23,660 or less are guaranteed overtime. This strengthens overtime protection for 6.7 million lower-wage salaried workers, including 1.3 million salaried white collar workers who were not entitled to overtime pay under the existing regulations. These workers will gain up to $375 million in additional earnings every year.

The Department’s new rule was published in the Federal Register on Friday, April 23, 2004 and a text version is also available online at www.dol.gov/fairpay.

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