Friday, August 04, 2006


Killing Overtime For Office Workers

The Bush administration proposes changes to the Fair Labor Standards Act (FLSA) that will eliminate overtime pay for millions of white collar workers.

The current method for determining whether or not a worker is ineligible for overtime is based on three tests:

1) The "Salary Level" Test - A worker must make below a certain salary to be automatically eligible for overtime. The only good news about the entire proposal is that the changes would raise the maximum weekly income under which workers cannot be denied overtime from $155 to $425. This is an anemic improvement, considering that the $155 standard has not been changed since 1975, and a weekly wage of $425 translates to only about $22,100 a year. Above that meagre annual salary, virtually everyone is now fair game.

2) The "Salary Basis" Test - Currently, a worker must be paid a salary, rather than an hourly wage, to be exempt from overtime. This would be expanded to include many different types of contract or temporary white collar workers who earn an hourly wage - and often have no benefits.

3) The "Duties" Test - A worker cannot be denied overtime unless his duties are defined as "adminstrative", "executive" or "professional". The definitions of these duties would be dramatically changed, as described below.

Office workers would need no longer to exercise "independent judgment" to qualify as "administrative" personnel. In other words, even if your job consists simply of being barked at and of then performing mindless chores without any freedom of action, you may still be assessed as an "administrator" and lose your overtime.

The level of skill that qualifies a worker as a "professional" would be decoupled from its association with higher education to include workers who perform jobs that merely require sufficient "experience". In other words, all you'd need do to join the privileged company of doctors and lawyers in the sphere of "professionalism" is to have toiled away at the same job long enough to have become "highly skilled", despite how thankless and unremunerative that job actually is. Aha, but the purpose of this spurious elevation is to reward you even less, not more.

To be exempted from overtime because of your "executive" status, you would not only no longer need to exercise "independent judgment". If you are engaged, say, at setting up computer equipment in a data center, you are performing a "supervisory" duty and would therefore be an "executive". Moreover, even if you spend most of your time not doing anything that could be construed as "supervisory", and work alongside the grunts virtually all day, you may still be painted with the tarbrush of "executive" exemption - because the new definition has drastically minimized the time spent "supervising" to qualify as a "supervisor".

All the exemptions above have been cunningly redefined to take maximum advantage of the growing preponderance of white collar labor in the American workplace, and of the traditional association of such labor with "management" - whether they are managers or not. This is especially poignant in the current business climate, in which white collar workers have less upward mobility than ever before - and thus far less true access to managerial status.

The proposed changes also include an additional exemption for all "highly compensated" workers earning a yearly salary of at least $65,000.

2.5 million salaried white collar workers would lose the right to overtime because of the expanded definitions of "administrative", "executive" and "professional" occupations. 5.5 million hourly white collar workers might lose it because of the same redefinitions, and 1.3 million additional white collar workers would lose overtime due to the proposed salary cap for "highly compensated" employees. In contrast, only 1.3 million workers would benefit from the increased maximum weekly wage, beneath which overtime cannot be denied.

"Eliminating the right to overtime pay" from the Economic Policy Institute
"8 Million White-Collar Workers Could Lose Overtime Pay Under Bush Plan" from AFL-CIO web site

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