New Rules for Overtime Pay Start Today

New federal overtime rules covering 115 million workers take effect today, but a legal struggle over the issue seems likely to take months or even years to resolve.

The Labor Department says the changes are meant to protect low-wage workers and limit lawsuits.

Yet union leaders argue that the new rules will actually mean less money in the paychecks of up to six million American workers who are likely to lose their overtime. A wide array of employees -- from registered nurses to chefs, insurance claims adjusters and retail store managers -- could be affected.

At least for now, most Florida corporations contacted for this article say they're not making major changes. Burger King, Chico's, Precision Response Corp., Office Depot and Darden Restaurants are among many employers that said they don't expect any impact from the new law.

Donn Flipse, chief executive of Field of Flowers, operator of floral superstores in Davie and Coral Springs, will pay overtime to his 100 employees the same way he has for the past 14 years.

''I felt the best way to avoid any problems was to classify as many as possible nonexempt,'' Flipse said. ``If you pay everybody hourly, call them nonexempt and pay the overtime, you can't get in trouble.''

Labor Department officials say the rules will benefit as many as 1.3 million lower-income and blue-collar workers, giving them the right to overtime for the first time.

The Bush administration revised its initial proposal in April after an earlier outcry. The Senate tried to block the rules in May, in an effort pushed by Sen. Tom Harkin, D-Iowa. Sen. John Kerry, Mass., the Democratic presidential nominee, has said he will repeal them if he is elected. And union leaders fear that many more workers, including registered nurses, could lose their overtime. They plan to take their message to the public today in news conferences in Miami and around the country.

''This could potentially make nursing a very undesirable profession to go into,'' said Debra Diaz-Reilly, a certified nurse anesthetist at Jackson Memorial Hospital and a member of the executive board of the Service Employees International Union Local 1991. ``You're looking at working more hours for less money.''

The rules redefine which workers are salaried professionals exempt from overtime pay.

Under the old overtime rules, registered nurses were considered professionals, but because most were paid hourly wages rather than on a salary basis, they were deemed eligible for overtime.

The new rule allows earnings for professionals exempted from overtime to be ''calculated on an hourly, daily or shift basis.'' That could allow employers to halt overtime even for registered nurses who are paid by the hour, according to a number of labor groups that banded together as the Coalition to Preserve Overtime Rights for Registered Nurses.

Yet, deciphering the rules is like reading tea leaves -- the Labor Department's preamble is 71 pages. It's a matter of interpretation, which courts or regulators will probably have to do.

''There has been a lot of alarmist talk, but I don't believe the regulations make any significant changes,'' said Kathy Houlihan, a labor and employment attorney with the Washington office of Morgan Lewis, whose clients include several South Florida companies. ``The decision if someone is exempt or nonexempt isn't a science, it's an art.''

At Burdines-Macy's, 200 formerly exempt employees will become eligible for overtime, said Carey Watson, spokesman for the department store chain. The affected employees work primarily at the Miami corporate offices as assistant buyers and assistant planners.

''It all has to do with what their responsibilities are,'' Watson said. ``Their job doesn't change.

``Under the new guidelines, this is what we felt we needed to do to be in compliance.''

The new federal rules require that anyone earning less than $23,660 a year must be eligible for overtime. The previous threshold was only $8,060.

The law also created a new category of ''highly compensated'' workers who will be exempt. They earn at least $100,000 annually and perform some administrative or executive duties such as managing one or more employees.

But the biggest controversy surrounds employees who earn between $23,660 and $100,000. The law exempts employees who are deemed executive, administrative, professional, outside sales and certain computer employees.

''Many employers go by the titles of the job. But the fact that someone is a manager or supervisor doesn't matter,'' said Norman Davis, a partner with Steel, Hector & Davis in Miami. ``You don't make the classification based on title. You make it based on duties.''

So someone whose position requires discretion or independent judgment on matters of significance would be considered exempt, Davis said. Therefore, the person would be paid a salary without overtime.

On the other hand, a secretary who earns a salary as opposed to an hourly wage could still be eligible for overtime because her duties don't fall under the exemptions created by the law, he added.

A recent study sponsored by the AFL-CIO found that, with the large exception of the higher-income threshold for overtime eligibility, ''in every instance where the department has made substantive changes to the existing rules, it has weakened the regulatory criteria for, and thereby expanded the reach and scope'' of exemptions that make employees ineligible for overtime pay.

''The working person is going to get screwed in this deal,'' said Fred Frost, president of the South Florida AFL-CIO. ``Overtime is not a luxury. Most people that work overtime are using it to put food on the table and trying to afford healthcare because their wages are just not growing.''

''They certainly have a different view of the rules than we do,'' said Steven Law, deputy labor secretary.

Tony Pugh of the Knight Ridder Washington bureau, the Washington Post Service and The Associated Press contributed to this report.

Posted by RWR8189
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The Democrats' False Attacks

False Claim: The Bush Overtime Changes Eliminate Federally Mandated Time-And-A-Half Pay After 40 Hours In A Week.

The Truth: President Bush Is Guaranteeing Overtime Pay For More Than 6.7 Million Workers. It is a patently false accusation that President Bush has eliminated mandated time-and-a-half. As a result of the President's actions:
5.4 million salaried workers, who under the previous regulations were unsure if they should be paid overtime, get an ironclad guarantee of overtime rights under the final rule — regardless of their job duties.
1.3 million salaried white collar workers, who were not entitled to overtime pay under the previous regulations, will now be entitled to either overtime pay or higher salaries. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/ whd/fairpay/main.htm, Accessed 8/21/2004)
False Claim: According To An AFL-CIO Study, Six Million Workers Will Lose Overtime Pay.

The Truth: The AFL-CIO Study Is Inaccurate. The AFL-CIO backed Economic Policy Institute (EPI), whose board includes the heads of several major labor unions, did not produce a serious, scientific study and includes numerous technical flaws. The study's author even admits that the figure is inflated with 1.5 million part-time workers who aren't even eligible for overtime hours. The truth is that 6.7 million workers will have their overtime protections guaranteed. ("The Facts and Fallacy Surrounding the Department of Labor's Proposed White Collar Regulations", Department of Labor, 2003 & House Education And The Workforce Committee, "Fact Sheet: Proposed DOL Regulations Protect And Ensure That Low-Income Workers Receive Overtime Pay," 7/21/03; "Would Bush Eliminate Overtime Pay for 8 Million?" FactCheck.org, 4/5/2004)

False Claim: Nurses And Day Care Center Employees Will Lose Overtime.

The Truth: The Final Rule Retains The Current Law Regarding Registered Nurses And Day Care Center Employees. The final regulation states that licensed practical nurses and other similar health care employees do not qualify as "exempt professionals." (Section 541.301(e)(2)) The new rules protect the overtime rights of day care center employees, who are primarily responsible for the physical safety and custodial care of children.

California Nurses Association Says Nurses Are Protected. "'We were worried at first, but we spoke to the Department of Labor and this is not going to affect us,' Jacobs said. 'Most nurses work on an hourly basis anyway and all of our nurses work under a collective bargaining agreement, which protects our salaries.'" (Marylee Shrider, "California Unlikely To Have Many Workers Who Qualify For Overtime Pay," Knight Ridder, 8/20/04)

False Claim: Police, Firefighters, Paramedics, Emergency Medical Technicians, And First Responders Will Lose Overtime Pay.

The Truth: The Final Regulation Clearly States That Police, Firefighters, Paramedics, Emergency Medical Technicians, And Other First Responders Are Entitled To Overtime Pay. (Section 541.3(b)) The Fraternal Order of Police, in responding these misleading attacks, said: "We can only speculate as to the motives of those who are dealing in half-truths and falsehoods… It is important to note that neither the existing nor proposed regulations would change the fact that the work performed by rank and file police officers, firefighters, and EMTs has been deemed by both the courts and the Department of Labor as manual work, and as not meeting the requirements necessary to classify these employees as ineligible for overtime under the professional exemption." ("Beware Of Misleading Info Regarding FLSA," Fraternal Order Of Police, http://www.grandlodgefop.org/legislation/issues/flsa/flsa_040123.html , 2/14/02)

False Claim: "Blue" Collar Workers Will Lose Overtime Pay.

The Truth: The Final Regulation Clearly States That "Blue" Collar Workers Are Entitled To Overtime Pay. (Section 541.3(a))

President Bush Strengthens And Expands Overtime Pay For Workers

FairPay: Overtime Security For The 21st Century Workforce. The Department of Labor's regulations strengthen overtime protections for 6.7 million American workers – including an additional 1.3 million white collared workers who will gain up to $375 million in additional earnings every year. Clearer rules updated for the 21st century workplace will reduce the litigation costs, encourage employers to hire additional workers, and strengthen FLSA overtime protections for American workers. These changes will make it easier for workers to know their rights, for employers to understand their obligations, and for the Department of Labor to enforce the FLSA. The winners under this final regulation are workers. The winners under the old regulations were trial lawyers involved with overtime lawsuits draining $2 billion out of the economy. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm, Accessed 8/21/2004)

Strengthening Overtime Protection. This regulatory change is part of the President's overall tort reform efforts. The previous overtime rules were outdated, confusing and complex, requiring workers to spend years in federal court to receive their entitled overtime pay. Federal court class actions for overtime pay have tripled since 1997 and now outnumber discrimination class actions.

Updating A 55-Year Old Law. The previous rule, written in 1949, include examples of how to classify key punch operators, machine men, and straw bosses but said nothing about more current job classifications such as physicians' assistants, licensed practical nurses, or paralegals. Outdated rules make it much more difficult for workers and employers to apply the duties tests to determine which workers are exempt from receiving overtime. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm, Accessed 8/21/2004)

Tripling The Threshold For Automatic Overtime Pay. President Bush has acted to triple the threshold under which workers are automatically entitled to overtime pay from $8,060 (less than the minimum wage) to $23,660 - the largest increase since the FLSA's creation in 1938. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm, Accessed 8/21/2004)

Strengthening Overtime Protection For Salaried Workers. The final rule strengthens overtime protection for more than 6.7 million workers, including:
5.4 million salaried workers, who under the previous regulations were unsure if they should be paid overtime, get an ironclad guarantee of overtime rights under the final rule — regardless of their job duties.
1.3 million salaried white collar workers, who were not entitled to overtime pay under the previous regulations, will now be entitled to either overtime pay or higher salaries. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm, Accessed 8/21/2004)
Strengthening Overtime Protection For Blue Collared Workers. The final rule strengthens overtime protections for blue collared workers, licensed practical nurses and first responders, such as police officers, fire fighters, paramedics, and emergency medical technicians, by clearly stating for the first time that these workers are entitled to overtime. ("Fair Pay," Department Of Labor Website, http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm, Accessed 8/21/2004)

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