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New Overtime Pay Law Greets Labor Day

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New Overtime Pay Law Greets Labor Day

By: Congressman Lamar Smith

Each year on the first Monday in September we celebrate Labor Day. It is dedicated to the economic achievements of American workers.

The movement for a national Labor Day began in 1882. That year thousands of union workers in New York took an unpaid day off and marched in support of a state labor holiday. In 1894, after 29 states adopted the holiday in honor of workers, President Grover Cleveland signed a Congressional resolution making Labor Day a national holiday.

As we acknowledge the contributions of working men and women on Labor Day, an important new law for overtime pay called FairPlay took effect last week.

Current labor regulations have not been reformed for more than 50 years. This meant that workers were not sure of their rights, employers did not fully understand their obligations, and the Department of Labor did not have clear rules to enforce.

Unfortunately, because of the uncertainty created by the old rules, many workers were forced to resort to the courts to get the overtime they deserved. It caused them to wait years to receive their pay, and also subjected their rights to the whim of the courts.

Under the old regulations someone who earned $8,000 per year could be classified as an "executive" and denied overtime. FairPlay nearly triples this level to $23,500, which guarantees that 1 million more workers can receive overtime.

Before FairPlay, workers who earned $65,000 or more could be ineligible for overtime pay because of the responsibilities that accompany a job at that salary. FairPlay increases the salary threshold to $100,000.

Despite some media reports, first responders, veterans, blue collar workers and union members do not lose overtime pay. Neither will Licensed Practical Nurses and Registered Nurses.

The Department of Labor estimates that FairPlay's reforms make 7 million more Americans eligible for overtime. For more information on what FairPlay means to you and your family, please visit the Department of Labor's website at

In addition to FairPlay, Congress and President Bush have lowered tax rates for everyone who pays income taxes. We also increased the child tax credit and provided relief to millions of Americans who own stocks by decreasing the tax rate on both dividends and capital gains.

Tax reduction has generated the strongest economy is nearly 20 years, with 1.5 million jobs created in the last ten months. Existing home sales reached an all-time new record in June. And consumer confidence hit a two-year high in July.

There is more we can do to generate sustained economic growth and job creation. This year I introduced the Lawsuit Abuse Reduction Act, legislation that requires judges to sanction those who file frivolous lawsuits. Frivolous lawsuits harm our economy and threaten to put business owners out of business. This is especially true of small business owners who do not have the money to fund prolonged lawsuits.

Over the past three years, our economy has faced many challenges - from stock market declines, to recession, to terrorist attacks. Yet it moves forward, creating new jobs and new opportunities for Americans.

Every day, American workers produce goods and services that have no equal. Their creativity, energy and commitment to excellence are the reasons why we have the strongest economy in the world and why we honor the spirit of hard work this Labor Day weekend.

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