Fair Labor Standards Act Overtime Rules

FAIR LABOR STANDARDS ACT OVERTIME RULES

Mr. HARKIN. I thank the Senator from Massachusetts and our assistant minority leader, the Senator from Nevada, Senator Reid, for bringing up this issue today.

Again, more disturbing news has come out this week, I say to the Senator from Massachusetts. He has covered the increase in poverty in this country. More and more people are being left behind and unemployment continues to go up. At that very time, this administration wants to pull the rug out from underneath people who work hard, to take away their overtime protection. That is coming to a head this week, I say to the Senator from Massachusetts, because the House of Representatives, the other body, is going to be appointing conferees to go to conference with us. I understand the motion will be made to instruct the conferees to yield to the Senate position which, as you know, is to deny the administration the funds necessary to carry out these proposed changes in overtime. So I am hopeful the House will again vote right on this and make sure we keep the Senate provisions and deny the administration the ability to go ahead and just yank away the overtime protections for millions of Americans.

Again, I ask the Senator from Massachusetts why is it—I don't know if there is any real answer. Why is it this administration is so intent on keeping the minimum wage as low as it is? Why are they so intent on that? What do they gain by doing that, by denying hard-working Americans an increase in the minimum wage? What does the administration gain for themselves or for this country by taking away the overtime protections for our workers which have been there since 1938?
Why would the administration be doing this if we are facing at this time higher rates of unemployment, poverty going up?

I don't know what the Senator's response to that will be, but in my view, this is so ideologically driven. This administration, I think, if it had its way, would take away all overtime protections, take away the minimum wage. They don't even believe in a minimum wage. They wouldn't even have a minimum wage. They would have our workers compete at the lowest possible level with workers from the Third World countries. It is not enough they are shipping our manufacturing jobs out of this country, they are now shipping into this country labor standards from Third World countries.

Again, I don't know. I thank the Senator from Massachusetts for pointing this out this morning. I think we need to discuss this more.

We are going to be discussing a supplemental appropriations bill on the floor today and for the next few days of $87 billion.
That is for rebuilding Iraq. Some of that is for the military, but with $21 billion we are going to build sewer and water systems, we are going to build new schools, we are going to rebuild some swampland—there is everything in there to rebuild the economy of Iraq. At the same time this administration wants to keep minimum wages low. They will not help us get the minimum wage up. And they want to take away overtime protection. What kind of fairness is there in that?

Mr. KENNEDY. The Senator has answered his own question. I think it is a pretty clear indication that the administration listens to K Street, which is another way of saying the principal powerful special interests, rather than Main Street, Main Street, where it is happening—whether it is in the rural or urban areas of Iowa, or my own State of Massachusetts.

These are hard-working people at the minimum wage. This issue, the minimum wage, is a women's issue because the majority of people who receive the minimum wage are women. It is a children's issue because more than one-third of the women who receive the minimum wage have children, so it is a family issue. It is a civil rights issue because so many of these men and women are men and women of color. And it is a fairness issue. America and Americans understand fairness.
If you work 40 hours a week you should not have to live in poverty. Yet this administration is strongly opposed to this and is using every different parliamentary trick to deny us a vote.

The majority Members of this body favor an increase in the minimum wage, but the administration is strongly against it and we are basically unable to get it. I think the majority favors also extending a hand to those millions of Americans who are unemployed, who have worked hard all their lives and, because of the economic policies, have been put into the lists of the unemployed. They have been out there looking. Increasing numbers of those have been leaving the job market.

We have historically recognized that we would offer a helping hand to those who want to work, who can work and who will work to provide for their families during the slump in the economy, and the administration says no. Beyond all of that, it says we are going to exclude 8 million hard working Americans from possible coverage for overtime.

I speak for all of our people in Massachusettes when I thank the Senator from Iowa for his leadership in the Senate and for the strong vote we got in the Senate. We had a bipartisan vote on that. It is enormously instructive and important for the administration to hear.

I certainly know the administration is working very hard against the position of the Senator from Iowa and in the House of Representatives. But I hope the kind of expression we saw here in the Senate will be followed by the House.

I thank the Senator for all of his good work.

Mr. HARKIN. Mr. President, I thank the Senator from Massachusetts for his kind remarks, but he has been the leader in terms of workers' rights for all of his time in the Senate. I am honored to be able to work with him to make sure we continue to support our working families.

I say to my friend from Massachusetts that the Secretary of Labor just wrote a recent editorial which ran in the Omaha World Herald, which is across the river from Iowa. It is interesting that she wrote my amendment "if enacted, would be a huge setback for U.S. workers from getting overtime pay for the first time."

What she is talking about there is part of this proposal would increase the threshold for guaranteed overtime pay from $8,060 a year to $22,100 a year. My amendment does not affect that. What we passed here in the Senate protecting overtime pay does not even remotely affect it. If the Secretary of Labor wants to increase the threshold from $8,060 a year to $22,100 a year, what is she waiting for? She can do that tomorrow. She could have done that this spring in the rules and regulations. It is because certain friends of this administration and industries say they wouldn't support it unless we made other changes to take away overtime protection from other workers.

It is true the proposed regulation does increase the threshold. That is fine. Our amendment doesn't touch that. With the other hand they take away overtime pay protection for over 8 million Americans. Then they say they want to simplify the rules. The proposal is far from simple. It is as complex as ever.

The Society for Human Resource Management was quoted in the Chicago Tribune:

It looks like they're just moving from one ambiguity to the next.

These rules and regulations can be simplified and updated without taking away workers' overtime pay protection. Again, don't take my word for it. Here is what industry says from a May 2003 analysis by Hewitt Associates, a global human resources outsourcing and consulting firm, to its clients on their Web site.

They said:

These proposed changes—

by the Secretary of Labor—

—likely will open the door for employers to reclassify a large number of previously nonexempt employees as exempt.

Exempt from overtime pay protection.

The resulting effect on compensation and morale could be detrimental, as employees previously accustomed to earning, in some cases, significant amounts of overtime would suddenly lose that opportunity.

That is not me saying that. That is a May 2003 analysis by Hewitt Associates, a global human resources outsourcing and consulting firm, to their clients which include more than half of the Fortune 500 companies.

There you have it. This is industry driven to take away the overtime pay protection so they can work people longer and not pay them any more.

As I pointed out on the floor previously, and as the Senator from Massachusetts did, this is antiworker and it is antifamily.
Many of these people are women. They are already paying for child care. Now they are going to have to work longer and pay more for child care, and they don't get a nickel more for overtime. It is not fair. It is not right.

I hope the House of Representatives will vote strongly to instruct their conferees to adopt the Senate provision. Let us have the administration go back and let us have a fair and reasonable updating of overtime regulations.

Yesterday, on Tuesday, September 30, there was a lead editorial in the Washington Post entitled "Fighting Over Overtime."

It said:

Despite a veto threat from President Bush, the House should vote to block the rules. While the overtime regulations need updating—

We all agree with that.

—the administration proposal tilts too far in the direction of employers. It ought to be redrawn in a more balanced way.

I ask unanimous consent that the article be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

[From the Washington Post, Sept. 30, 2003]

FIGHTING OVER OVERTIME

For 65 years employees have been entitled to an hour-and-a-half's pay for every extra hour they have worked beyond the
standard 40-hour work week. But those protections don't extent to certain white-collar workers—people in executive, administrative and professional positions—and figuring out which employees are covered has become a particularly byzantine area of labor law. The Bush administration has proposed a sweeping rewrite that it says will better protect the most vulnerable workers while giving employers clearer guidance. Labor groups argue that the improved coverage is so limited, and the exceptions so broadly written, that millions of workers would be deprived of eligibility for overtime. The
Senate voted this month to prevent the new rules from taking effect, and while the House voted narrowly the other way, it is set for another vote this week. Despite a veto threat from President Bush, the House should vote to block the rules.
While the overtime regulations need updating, the administration proposal tilts too far in the direction of employers. It ought to be redrawn in a more balanced way.

Employees who earn less than $8,060 per year are automatically entitled to overtime. The Department of Labor wants to raise that floor to $22,100. The increase would provide automatic coverage to 1.3 million workers, the administration says, while labor groups say the number is much smaller. An increase in the minimum level is overdue (it was last raised in 1975), but the amount proposed by Labor—$5,000 less than would result simply from adjusting for inflation—is too low. The proposed rules would also make it more difficult for employees who earn more than $65,000 to qualify for overtime pay.

The biggest problem with the changes would be in the middle range of workers who earn between $22,100 and $65,000. In this area, the new rules would give employers far more freedom to disqualify employees. For example, employees would be considered exempt "executives" if they managed a department, directed the work of two or more other employees and had their recommendations about hiring, firing or promotion "given particular weight." Thus, a $23,000-a-year supermarket produce manager could be refused overtime pay. The Labor Department says the changes are merely intended to make the rules easier to apply, not to deprive anyone of overtime. Yet it's hard to see how some of its gauzy new tests are going to promote any less misunderstanding. Administrative workers, for example, are defined as those who hold "a position of responsibility" with the employer, something that is in turn defined as doing "work of substantial importance" or "requiring a high level of skill or training."

Labor Secretary Elaine L. Chao, dismissing the arguments of those who "think employers are out to exploit workers," says that businesses are lobbying for the changes "not because they're getting any particular benefit but because they just want clarity." But employers and their advisers see it differently. Hewitt Associates, a leading human resources consultant, noted that "employees previously accustomed to earning, in some cases, significant amounts of overtime pay would suddenly lose that opportunity." Assessing the rules in a memo to clients, Proskauer Rose, a law firm that represents employers, noted, "Thankfully, virtually all of these changes should ultimately be beneficial to employers." Workers who earn overtime derive a quarter of their income, on average, from overtime pay. They might not be quite so thankful.