A think tank has issued a report that contends the Bush administration's proposed
revisions of the overtime rules in the Fair Labor Standards Act will render
more than 8 million white-collar worker ineligible for OT, including some who
earn as little as $22,100 per year.
The report was issued by the Economic Policy Institute, which describes itself
as "a nonprofit, nonpartisan think tank that seeks to broaden the public
debate about strategies to achieve a prosperous and fair economy." It lists
both corporations and unions as donors, though various news stories describe
it as a "liberal" organization.
The changes, proposed by the Labor Department on March 31, would "dramatically
increase" the number of workers whose jobs are classified as professional,
administrative, or executive and therefore ineligible for overtime pay, according
"This blurring of the lines between managerial and hourly staff, coupled
with a downgrading of the educational standards required to exempt employees
from overtime pay, will give employers a powerful incentive to switch millions
of workers from hourly to salaried status in order to reap the benefit of a
newly created pool of unpaid overtime hours," EPI said.
Ross Eisenbrey, EPI’s vice president and policy director, said the changes
"would create, in effect, a massive subsidy to employers paid for by their
"As more employers take advantage of the new rules," he continued,
"it will create a rush-to-the-bottom pressure that will eventually force
even reluctant employers to participate in order to keep their labor costs competitive.”
Among those who stand to be affected by the changes, according to EPI, are workers
with little more than a high school diploma, workers with little or no on-the-job
discretionary authority or responsibility, and frontline supervisors who spend
most of their workday doing the same tasks as those they supervise.
Under the new rules, they could be reclassified as executive or administrative
employees who would no longer be able to claim extra pay for hours worked above
40 per week, EPI said.
In addition, the Labor Department proposal would greatly lessen the amount
of education required for a worker to be
categorized as a “learned professional” and therefore ineligible for
overtime pay, EPI claimed. It said the new definition would no longer require
a degree beyond a high school diploma for this classification. Work experience
or military training may substitute for academic training, it added, but the
proposed rules do not establish a minimum amount of such experience or training.
Similar loosening of how executive and administrative functions are defined
and how much of a job must be devoted to such duties gives employers wide latitude
for redefining many jobs as ineligible for overtime, EPI said.
The public comment period on the proposed regulations officially ended on Monday;
the new rules could be in place by the fall.