On January 20, hours before a scheduled cloture vote on the omnibus spending bill (H.R. 2673), the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education heard testimony on the Department of Labor’s March 31, 2003, proposed rule on overtime pay.
During consideration of the FY2004 Labor, Health and Human Services, and Education spending bill (H.R. 2660) on September 10 (see The Source, 9/12/03), the Senate approved an amendment that would have blocked the Department of Labor (DOL) from using federal funds to implement the proposed rule. Much to the dismay of Senate Democrats and some Republicans, the provision was removed from the final omnibus bill during conference. The Senate approved the omnibus bill on January 22, and it will now go to the White House for the President’s signature.
Subcommittee Chair Arlen Specter (R-PA) supported the Senate amendment in September and called the hearing because a number of his questions concerning the proposed overtime rule had not yet been answered. In his opening statement, he announced that he would soon introduce legislation designed to clarify worker eligibility for overtime pay under the Fair Labor Standards Act (FLSA).
Secretary of Labor Elaine Chao explained that the overtime pay proposal “would increase the minimum salary level required for exemption as a ‘white-collar’ employee to $425 per week, or $22,100 per year. This is a $270 per week increase, and the largest increase since the Congress passed the Fair Labor Standards Act in 1938. Under this change, all employees earning less than $22,100 a year automatically would be entitled to the overtime protections of the FLSA.” She also noted that most workers with an annual salary of $65,000 or who were in “a position of responsibility” would no longer be eligible for overtime pay.
The DOL estimates that approximately 1.3 million additional workers would become eligible for overtime pay for the first time, and Secretary Chao noted, “Of the 1.3 million workers who would be guaranteed overtime pay under the Department’s proposal, all earn less than $22,100 per year; nearly 55 percent are women; more than 40 percent are minorities; nearly 25 percent are Hispanic; and nearly 70 percent have only a high school education or less.”
Refuting the claims of those who oppose the proposed rule, Secretary Chao argued, “The Department’s overtime reform 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.”
David Fortney, an attorney and a former DOL employee, argued that the changes to current overtime pay regulations are necessary because “the white-collar exemption regulations are dramatically outdated and have imposed significant confusion and uncertainty in determining who is, and who is not, exempt from the FLSA’s minimum wage and overtime requirements.”
Richard Trumka of the AFL-CIO argued that the DOL proposal would redefine 8 million workers as ineligible for federal overtime pay and would “dishonor the sacrifice of millions of working parents today who work longer hours to provide for their families, and would be a slap in the face to working parents in desperate need of more family time away from work.”
Explaining that the Department’s own analysis estimates that 644,000 workers who are currently eligible for overtime pay would lose that eligibility, Jared Bernstein of the Economic Policy Institute stated, “In trying to determine who would lose overtime protections, the Department of Labor only considered persons who are currently working overtime.” He went on to add, “While about 90 million hourly workers are currently covered by the FLSA’s overtime regulations and thus are eligible for time-and-a-half pay when they work overtime, the DOL’s widely published number the number they have set forth in front of this committee is based only on the 11 to 12 million who were actually paid for overtime at the time of the survey.”
Testifying on behalf of the American Nurses Association, Patti Hefner stated that, under the proposed rule, “millions of workers, including nurses who enjoy overtime protection would no longer qualify for overtime pay. Make no mistake about it. The proposed changes to the overtime regulations will mean a huge pay cut for these workers. For nurses, it will mean longer hours with less pay and likely mandated hours.”
