Labor groups say the Labor Department's proposed overhaul of the federal overtime-exemption
rules would thrust workers who earn between $22,100 and $65,000 a year into
a category where it's easier for employers to classify them as exempt and ineligible
for overtime pay.
"We are concerned," AFL-CIO spokeswoman Kathy Roeder told the Kansas
City Star. "We believe that the net effect will be that more people lose
their overtime rights than gain them, but it's impossible to guess exactly how
many might be reclassified and eliminated from protection."
Yvonne Ralsky, a spokeswoman for the Labor Department, said outside economists
have told the department that about 640,000 high-skilled, college-educated workers
might fall into that category.
"But employers could still pay them overtime, even if they're recognized
as professional exempt," Ralsky added.
The DOL proposal calls for revisions in the complicated Fair Labor Standards
Act guidelines for determining whether a worker is classified as an hourly wage
earner eligible for overtime pay or a salaried worker who is not.
Ron Bird, chief economist at the Employment Policy Foundation, a Washington
research group that has for many years called for revisions in the law, told
the Star: "Right now, the rules are so difficult to understand that it's
easy for well-meaning people to come to different conclusions about it.
"It's a reform that is long overdue because existing regulations were
based on job descriptions and wage cutoff amounts that are far out-of-date."
A prime focus of the proposal, which will be published in the March 31, 2003,
edition of the Federal Register, is to revamp the "duties test" used
to determine who are salaried, or exempt, workers because of their executive,
administrative or professional duties.
The proposed "executive duties" test would classify workers as exempt
if they manage the enterprise, direct the work of two or more employees, and
have authority to hire or fire or make such recommendations that are given particular
The proposed "administrative duties" test would require a "position
of responsibility." That wording would replace a "discretion and independent
judgment" test that has been the subject of continued litigation through
The proposed "professional duties" test would exempt "learned
professionals" who gain knowledge or skills through a combination of job
experience, education and training. This test probably would remove overtime
pay rights from some workers who now have them.
The Bush administration, through the DOL, argues that the changes would simplify
the now-complex standards and make it easier for individual employees and employers
to work out pay arrangements that best suit their needs. In addition, it estimates
that an additional 1.3 million low-income workers would be eligible for overtime
But the AFL-CIO is among labor groups expressing fear that the proposed changes
could threaten the 40-hour workweek.
"The Bush rules could mean that many workers would face unpredictable
work schedules because of an increased demand for extra hours for which employers
would not have to pay time-and-half," the AFL-CIO says in a news release.
"The Bush administration claims its proposal to raise the income ceiling
for workers to automatically qualify for overtime pay would extend protection
to some lower-income workers currently excluded," the union observes. "But
most of these workers already are covered by overtime protections because of
the nature of their jobs. In contrast, the Bush administrations proposed
changes in workers job definitions and duties that must be met to allow
an employer to classify workers as exempt and thus ineligible for
overtime would affect many more hundreds of thousands of workers.
"Many working families depend on overtime pay to balance their checkbooks
and pay billsespecially during the current economic recession that has
resulted in stagnant and declining wages, increasing costs of health care, prescription
drugs, child care, gasoline and other everyday expenses. The Bush proposal would
cut into many of those families paychecks."