Jumpstart our Business Strength

JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT-CONTINUED

Mr. ENZI. Mr. President, actually we are debating the JOBS bill right now. There is a lot of conversation that takes us in another direction. I suspect that is for a very specific purpose-actually to get into Presidential elections. What we ought to be concentrating on is making sure there are jobs in this country. Some of those jobs are at stake right now because the WTO said we violated international law and they placed a 5-percent penalty on companies from the United States, and that penalty grows at 1 percent a month.

While we delay on this bill, the price is going up for American business, and when business declines, the jobs decline. Perhaps that is a point one side would like to make. Maybe that is what they want to have happen. I don't want jobs to decline. I don't care who is President or what the race is. It is very important we get jobs.

Part of the discussion we have entered into under this JOBS bill has been one about the overtime rule the Secretary of Labor has published. We have heard a lot of comments about overtime from our colleagues on the other side of the aisle. I want people to know the rest of the story. I want people to be aware of the smokescreen that covers election year politics with misleading rhetoric about overtime pay. It is time to strip rhetoric from reality, look through the smokescreen, and see who is really helped and hurt by Senator Harkin's attempt to block the Department of Labor from updating the rules governing overtime eligibility for white-collar workers. That is right, the word is "updating." The Department was told by GAO the rule needed to be updated. The rule was outdated. The rule referred to things people cannot possibly comply with because nobody knows what they are anymore. It is confusing as well.

The Senator from Iowa has proposed keeping the trial lawyers' dream. He wants to keep the gray area in the bill as an addition to the rule. Yes. There is a gray area. I can tell you this mostly affects small businesses. I can tell you small businesses realize it is going to cost them about $375 million a year in overtime. I don't know how we can talk about a decrease in overtime when it costs them $375 million more in overtime, but to have the gray area cleared up they are willing to do that. Why are they willing to do that? Because right now that $375 million potential is for lawyers' fees to decide gray areas. Who needs that? We would rather put the money in the workers' pockets.

This clarifies who gets overtime, but it clarifies it more broadly than anything we have ever done before. Do you know right now the only people who know for sure they will get overtime are those who make less than $8,060 a year? Yes. If you earn over $8,060 a year, you move into this gray area where you may have to hire an attorney to help you figure out whether you get overtime. The small businesses have to do that.

This rule the Department of Labor has issued is going to raise that $8,060 to $23,660-pretty much triple the amount. It is long overdue. It needs to be done, and it was willing to be done from the very beginning.

The Department also put in there that white-collar workers earning over $65,000 were not assured of overtime. They listened to 75,000 comments and said, We picked the wrong number. It should be over $100,000.

You notice I mentioned white-collar workers. Blue-collar workers are exempt and assured of the overtime. It doesn't have the $100,000 limit on it.

Another thing that disturbs me about the debate we are having is the implication that without a rule, without a law, there would be no overtime. I want you to know there are businesses-particularly small businesses-out there that are not only paying overtime for some special tasks, but they are paying double time and triple time to be sure they have the workers they need to do the job.

There needs to be a rule. The rule needs to be one that is newer than the 50-year-old one so we can understand the jobs that are being talked about.

Last March, the Department solicited public comments on a proposal to update these regulations. They received more than 75,000 comments on the proposal. I happen to believe public comment plays a critical role in the regulatory process. We want the public to comment on any new rule being written. We then want the Department to review these comments and to respond to them. That is how the process is supposed to work. This is the regulatory process Americans expect and deserve. I have seen times before when agencies did not pay attention. Then it became critical for us to do something. That is not the case in this instance. They listened to the 75,000 comments that were sent in writing. It is obvious they listened to the comments on this floor, and they made those revisions in the rule before they published the final rule. The Department of Labor carefully considered those 75,000 comments. They listened to the concerns of the American people, and then they did the final overtime rule and they made substantial changes to the proposal.

I have my own concerns with the proposed rule. In fact, I wrote a letter to Secretary Chao, along with Senator Collins, asking the Department to pay particular attention to protecting the overtime status of public safety officers, veterans, and nurses.

I ask unanimous consent that a copy of the letter be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:
U.S. SENATE,
Washington, DC, April 16, 2004.
Hon. ELAINE L. CHAO,
Secretary of Labor, U.S. Department of Labor, 200 Constitution Avenue, NW., Washington, DC.
DEAR SECRETARY CHAO: We want to take this opportunity to applaud the Department of Labor's efforts to update and clarify the rules Defining and Delimiting the Exemptions for Executive, Administrative, Outside Sales and Computer Employees. The proposed rule revises the definitions of "executive," "administrative," and "professional," employees considered exempt from the Fair Labor Standards Act overtime compensation requirement.
The workplace has dramatically changed during the last half century. However, the regulations governing the overtime exemption for such employees remain substantially the same as they were fifty years ago. As our economy has evolved, new occupations have emerged that were not even contemplated when the current regulations were written. The Department of Labor has undertaken the difficult but necessary task of updating the rules to reflect the realities of the 21st Century workplace. In so doing, the Department will extend overtime protection to an estimated 1.3 million low-wage workers.
The Department of Labor has received approximately 80,000 comments to the proposed rule. We happen to believe that public comments play a critical role in the regulatory process. The Department of Labor has the responsibility, and must be given the opportunity, to review these many comments. We urge the Department to carefully consider all of the public comments in crafting the final regulations.
We ask the Department of Labor to pay particular attention to concerns that have been raised regarding the overtime status of public safety officers, veterans, and nurses. The final rules should clearly reflect that the overtime rights of public safety officers, veterans, and nurses will not be restricted. These individuals have devoted their lives to protecting the lives of Americans. They deserve our protection as well. We also ask the Department of Labor to be responsive to the needs of small businesses in finalizing and providing compliance assistance on the rule.
We look forward to the Department of Labor publishing its final rule that is responsive to the public comments received and the concerns we mentioned.
Sincerely,

Michael B. Enzi,

SUSAN M. COLLINS.
Mr. ENZI. Mr. President, we asked the final rule clearly ensure the overtime rights of these workers would not be restricted. I am very pleased the Department made the changes to clearly reflect the overtime rights of public safety officers, veterans, and nurses would not be restricted.

Let me highlight some of changes that were made in the final rule to better protect the overtime rights of workers and many others.

The final rule states first responders such as police, firefighters, paramedics, and emergency medical technicians are eligible for overtime pay. No question; no gray area, it clears it up.

The reference to training in the Armed Forces has been deleted and clarifies that veteran status does not affect overtime. The veterans will get their overtime regardless of the training received in the armed services.

The final rule also states licensed practical nurses do not qualify as exempt learned professionals and are therefore eligible for overtime pay.

The final rule retains previous law regarding registered nurses which assures them of overtime.

The final rule provides blue-collar workers are eligible for overtime pay.

To be considered exempt from overtime, the salary level for highly compensated employees is the final rule which has been increased from $65,000 to $100,000.

The final rule clarifies the contractual obligation under collective bargaining agreements is not affected.

The final rule maintains the previous law requirement that exempt administrative employees must exercise discretion and independent judgment.

The final rule clarifies there is no change to current law regarding the educational requirement for the professional exemption.

Significant changes were made to address the concerns raised about the proposed rule. This is exactly how the public comment period is designed to work and exactly how it did work in this situation. The regulatory process worked, and we have a final rule that is better for both workers and employers.

Again, we are talking about the small businessmen who do not have time to go through a lot of this or have the ability to hire attorneys to figure these things out. We need to keep it simple and understandable. The rule does that.

Before the final rule was published, my colleagues on the other side of the aisle stood in the Senate and blasted the proposed rule on the very issues that the final rule corrects. The Senator from Iowa still wants to block the Department of Labor from updating the rules governing overtime pay for white collar employees. This would, in effect, tell the American people that the public's role in the regulatory process means nothing. This would say those 75,000 comments mean nothing. This would leave complex and confusing rules that have not been significantly changed in 50 years. We owe all our constituents more than that.

When I am back in Wyoming, I like to hold town meetings to find out what is on the minds of my constituents. At each town meeting there is usually someone in attendance quite concerned about government regulations. I am often told to rein in big government and keep rules simple, keep them current, keep them responsive, keep them understandable for small business, and make sure they make sense in today's ever-changing workplace.

My colleague on the other side of the aisle would take the opposite approach. Instead of keeping it simple and current, he wants to keep all of the gray areas from before and impose them on a second set of regulations. That is what we need-multiple sets of regulations; now a misunderstandable set with a new set imposed on it, protecting the old set so the trial attorneys' dream still exists. He wants to prohibit the Secretary of Labor from updating the outdated rules regarding white collar employees under the Fair Labor Standards Act overtime requirements. Simply put, it is an attempt to reject the new, turn back the clock, and look to yesterday for the answers to tomorrow's problems. The amendment keeps the confusion. It is an approach that is doomed to failure. I am opposed to it.

There is no question the workplace has dramatically changed during the last half century. The regulations governing white collar exemptions, however, remain substantially the same as they were 50 years ago. The existing rule takes us back to the time when workers held titles such as straw boss, keypunch operator, leg man, and other occupations that no longer exist today. Our economy has evolved. New occupations have emerged that were not contemplated when the regulations were written. A 1999 study by the General Accounting Office, GAO, recommended that the Department of Labor comprehensively review current regulations and restructure white collar exemptions to better accommodate today's workplace and to anticipate future workplace trends. This is precisely what the Labor Department has done.

What will Senator Harkin's effort to block the final rule do? It will set the clock back to 1954 and try to force a square peg-the 21st century jobs-in the round hole of the workplace 50 years ago. Worse, it keeps the gray areas of the past rule instead of clarifying. This obstruction will undermine the Department of Labor efforts to extend overtime protection to an additional 1.3 million low-wage workers. Under the old rule, only those workers earning less than $8,060 a year are automatically protected for overtime pay. The Department's new rule will raise this threshold to $23,660 a year. The final rule provides lower income workers with the protection they deserve.

By undermining the Department's efforts to better protect lower income workers, who is this amendment going to protect? The Department determined that few, if any, employees earning between $23,660 and $100,000 will lose their overtime pay under the new rule. The Department estimates that 107,000 employees who are earning over $100,000 could-could but not necessarily would-lose their overtime. Could our colleagues be willing to deny overtime pay for an additional 1.3 million low-wage workers in order to protect the overtime for the 107,000 workers earning above $100,000? Is Congress going to undermine the purpose of the Fair Labor Standards Act, which is to protect low-wage workers?

The Senator from Iowa and his effort to block the final overtime rule will not protect first responders, veterans, blue collar workers, or nurses. The final rule has been improved to clearly protect the overtime rights of these workers. Therefore, the opponents of updating and clarifying the white collar overtime rule had to come up with new objections. No lawsuits necessary, it is very clear. That is what the Department intends.

On April 13, the AFL-CIO released and began soliciting contributions for a political TV ad attacking the Department of Labor final overtime rule. Here is what is interesting about that: That attack came a week before the final rule was publicly available, before they knew what was in it. Such tactics suggest a greater interest in playing election year politics than in protecting workers.

Let me respond to some misleading claims about the final rule. Some have claimed that team leaders will lose overtime pay under the final rule. In fact, the new rule will guarantee overtime protection for blue collar team leaders and is more protective of overtime pay for white collar team leaders. Furthermore, there is no change to current law regarding the overtime status of computer employees, financial services employees, journalists, insurance claims directors, funeral directors, athletic trainers, nursery schoolteachers, or chefs.

It is time to get beyond the election year rhetoric and misleading information about who is supposedly harmed by the Department's new overtime requirements; therefore, I am supporting the amendment offered by Senator Gregg of New Hampshire to require the final overtime requirements to safeguard the overtime rights of workers earning less than $23,660 and certain categories of workers that some erroneously claim would lose overtime rights. His amendment very specifically names those and assures those rights. It is in the rule as well. I am confident the final regulations published by the Department of Labor on April 23 already do that, too.

The Gregg amendment serves to make it clear that it is the intent of Congress to ensure that the overtime rights of 55 listed occupations and job classifications are not weakened. These occupations and job classifications include the team leaders, registered nurses, the licensed practical nurses, oil and gas workers, refinery workers, steelworkers, shipyard workers, journalists, firefighters, police officers, nursery schoolteachers, and financial services workers, to name a few.

The Harkin amendment effectively blocks the Department from extending overtime pay to low-wage workers and updating confusing overtime requirements. In contrast to the Harkin amendment, the Gregg amendment does not undermine the Department of Labor efforts to update and clarify the overtime requirements and extend overtime protection to 1.3 million low-wage workers and clear up these gray areas that just help the attorneys. The amendment offered by Senator Gregg will ensure that the overtime rights are guaranteed to those 1.3 million low-wage workers, strengthened for another 5.4 million workers, and clarified for all workers and employers.

The antiquated and confusing white collar exemptions have created a windfall for trial lawyers. Ambiguities and outdated terms have generated significant confusion regarding which employees are exempt from overtime requirements. The confusion has generated significant litigation and overtime pay awards for highly paid white collar employees. Wage and hour cases-this is important-now exceed discrimination suits as the leading type of employment law class action. The amendment assures those gray areas will stay, causing court action right now. The new rule clarifies and requires these areas be cleared up, but more clearly states the people who will absolutely get overtime. It states who will be entitled now. It protects the workers and puts the money in the workers' pocket, not in legal action. If these rules are clear, employers will know when they are complying with the law. This is important, particularly and especially for small business. That is for whom I always make my pleas.

Small businesses are the only ones being punished by the rules. They don't have the specialists to determine the gray areas. So they wind up in court having to solve the gray areas after the fact. It is much better to solve it before the fact. We have to worry about small businesses which should not have to rely on lawyers or accountants to tell them how to pay their employees.

The Department of Labor has estimated these new regulations are going to cost employers an additional $275 million on an annual basis. However, the new overtime rule will provide much needed clarity.

As a former small business owner, I know employers want to be able to pay their workers, not their lawyers. The Harkin blocking amendment would only add to the current state of confusion. Instead of preserving overtime rights, which the Harkin amendment purports to do, it will create even more complexity and litigation, piling rule on rule.

The blocking amendment creates a two-tiered scheme which would require two different tests to determine a worker's overtime status. The present gray area and the other one would have to be worked to be combined. So anything that would have been a gray area before will still be a gray area. It will freeze workers in jobs they have outgrown. The blocking amendment will mire the final overtime regulation in years of litigation, likely preventing them from ever taking effect.

The only clear winners for the effort to block the new rule will be the trial lawyers who will benefit from a continued state of confusion. Most people would prefer to live in a different state than that. We are spending taxpayer dollars sorting through cases that could be solved with clarity.

Under the blocking amendment, workers will still have to wait years for a court to act before they could receive the overtime pay they deserve. Why should the United States stand in between workers and their overtime pay? We need to defeat the blocking amendment that would block the final rules from taking effect. We need to ensure that American workers deserving of overtime pay will see their hard work reflected in their paychecks, not in litigation.

Today's Washington Post editorial urges lawmakers to hold off blocking the new overtime rules from taking effect. I ask unanimous consent to print the editorial in the RECORD.

There being no objection, the editorial was ordered to be printed in the Record, as follows:

[From the Washington Post, May 4, 2004]

OVERTIME IMPROVEMENT

Last year the Labor Department drew widespread criticism for proposed changes to overtime rules for white-collar workers. We agreed with critics who said the new rules tilted to employers and risked depriving too many workers of pay to which they are entitled. Now Labor has revised its proposal, and the new rules, while still worrisome in some respects, are substantially improved.

Unions and their allies, with some basis for being suspicious of this administration's attitude toward workers in general and the overtime question in particular, argue that the regulations still would unfairly jeopardize the overtime rights of millions of workers. They are pressing for a Senate vote, expected today, that would block the rules from taking effect. We think lawmakers should hold off. If the regulations are inconsistent with the federal law designed to protect the right to overtime pay, they can be challenged in court. And if employers exploit the regulations to unfairly deny overtime pay to workers, they, too, are subject to being sued. In the meantime, the new rules offer some significant benefits for workers.

At issue is the meaning of the Fair Labor Standards Act, which guarantees time-and-a-half overtime pay for those who work beyond the standard 40-hour week. That 1938 law makes an exception for white-collar workers-those in executive, administrative and professional positions. Figuring out who falls into this category has become a particularly byzantine area of labor law, and the regulations outlining the exceptions haven't been updated for 50 years.

The Labor Department's changes would guarantee overtime rights for workers who earn less than $23,660 a year, even if they are ostensibly white-collar. That's up from the current, woefully outdated level of $8,060 and a slight increase over the original proposal. It would have been even better to adjust the salary level to keep pace with inflation (bringing it to about $28,000) and -given that it took three decades to make this change-to build in indexing for inflation. At the higher end of the income scale, the new rules would make workers who earn more than $100,000 largely exempt from overtime eligibility, a significant increase from the original proposal, which would have capped overtime rights at $65,000.

The more complicated issue involves changes in determining which workers fall into the category of executive, administrative or professional employees not entitled to overtime pay. The department says it expects that few, if any, workers would lose overtime protections; labor groups insist otherwise.

Opponents point to such provisions as the "concurrent duties" rule, which would permit workers to be considered executives ineligible for overtime even if they perform non-managerial jobs. For example, assistant managers could stock shelves, cook food, serve customers and still be "executives" if their "primary duty" is management. Another provision would allow workers to be considered exempt "administrative" employees if they lead a team on a "major project," including improving workplace productivity.

Depending on how they are implemented, these exemptions, and others, could be reasonable reflections of a modern workplace, or they could be abusive incursions on workers' overtime rights. What's needed now is not to block these regulations but to ensure that they are vigorously enforced with an eye to protecting the vulnerable workers the law was intended to benefit.

Mr. ENZI. The Washington Post states:

What's needed now is not to block these regulations but to ensure that they are vigorously enforced with an eye to protect the vulnerable workers the law was intended to benefit.

I urge my colleagues to support the Gregg amendment which will allow the Department of Labor to provide clearer and fairer overtime rights for workers. I also urge my colleagues to oppose Senator Harkin's reform blocking amendment which will only line the pockets of the trial lawyers.

I yield the floor and reserve the remainder of our time.