Thursday, July 15, 2004

Congress should prevent the Bush administration from changing the overtime rules

Why you're right:

1. The revisions would cause an estimated six million people to lose overtime benefits. According to the Economic Policy Institute, the new Labor Department regulations reclassify jobs and create newly exempted fields, causing millions to lose benefits. Among those no longer able to receive overtime would be "130,000 chefs and cooks, 160,000 financial service workers and 117,000 teachers and computer programmers." (EPI, Washington Post)

2. The revisions would make it easy for an employer to avoid paying overtime to any worker. Employers can block everyone making $23,660 per year or more from overtime pay by attaching to their job description a vague, undefined term such as "team leader." For those making under the threshold, the Department of Labor recommended reducing workers’ base salary to offset the extra compensation from overtime pay. (Courier Worker)

3. The revisions would create confusion. The Labor Department has characterized the new revisions as an effort to simplify the regulations. But the new rules are more than 500 pages long. No one can predict "which workers earning between $23,660 and $100,000 would still qualify for overtime pay." (New York Times)

Why they're wrong:

1. The overtime revisions don't meet the administration's stated goals. Secretary of Labor Elaine Chao insists that "our intent is always to strengthen overtime protections." Entirely eliminating overtime pay for six million workers doesn't get the job done. (New York Times)

2. The real goal of the revision – consistent with conservative market orthodoxy – is to remove any restrictions on employers to set their own wages. But there is no empirical evidence this is necessary or desirable. With the existing overtime rules in place, corporate profits are at an all-time high, while real wages for workers are stagnant. (Bloomberg)