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that is long overdue because existing regulations were based on job descriptions and wage cutoff amounts that are far out-of-date."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 weight.

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 years.

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 pay.

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 administration’s 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 bills—especially 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."

Links

• Kansas City Star article
• AFL-CIO news release