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Employees Adjust To Overtime Rules

Some Fear Changes Could Threaten Protection

By Amy Joyce
Washington Post Staff Writer
Sunday, September 5, 2004; Page F05

Virgil Bishop, 58, earns $10,000 of overtime a year as an electronics technician. But he worries that his extra pay could disappear just as he is preparing for retirement, which he hopes is a year or two away.

Bishop's overtime pay, which supplements his base pay of $40,000, is protected under his union contract, but when the contract comes up for negotiation, overtime could be one of the chips on the table. Bishop fears that his two years of military training could qualify him as a "learned professional," a classification that could cost him the extra pay under overtime regulations that took effect Aug. 23. "It's just one more erosion to the labor movement [after] all these years of working to get in a situation of being able to earn more," Bishop said.


Union members protest the new overtime regulations outside the Labor Department. (Gerald Herbert -- AP)

Meanwhile, some of the graduate assistants at Syracuse University will begin to earn overtime pay for hours they work beyond 40 per week. That will complicate matters for these researchers, who had the freedom to come and go when they felt it was necessary, sometimes putting in well over 40 hours a week, depending on their workload.

"What that obligates us to do is keep records of the hours they work," said Roger Casanova, director of compensation administration at the school. He said Syracuse would try to be more strict about limiting the time they work.

An immeasurable legion of workers did not wake up on Aug. 23 without overtime pay, as some had feared. But subtle changes to the old regulations could translate into workers' loss of overtime protection eventually, as in the case of those whose overtime pay is protected by a union contract now. The possibility is causing an uproar among workers and workers' rights groups.

But others say that changing one's status from a salaried to an hourly employee is not such an easy transition, either. Some administrative employees at Syracuse who are newly eligible for overtime will lose "a couple of fringe benefits associated with whether someone is exempt," Casanova said, such as vacation time and sick leave.

For now, two camps are battling over the overtime regulations. The Department of Labor (which wrote the rules), corporations and associations tout the new rules as easier to understand, a better deal for workers, and a much-needed update to outdated rules. Labor unions, workers' rights advocates and Democrats argue the rules will be detrimental by taking away the overtime rights of as many as 6 million workers.

The regulations will likely be back in political play as Congress returns to session and as the presidential election nears. Democratic nominee Sen. John F. Kerry (Mass.) said he would repeal the rules if he becomes president.

The Fair Labor Standards Act of 1938 set the normal American workweek at 40 hours. For many workers, the act guarantees the right to overtime pay for each hour worked beyond 40 in a week.

But that will barely be the case under the new regulations, some argue.

"Before, the [Fair Labor Standards Act] was designed to make it more inclusive. The new regulations are just a reversal of direction that we hadn't seen before," said Lonnie Golden, associate professor of economics and labor studies at Penn State University, Abington College.

But a lot of that reversal is yet to be seen. Ross Eisenbrey of the Economic Policy Institute, who analyzed the new regulations and census data to conclude that 6 million could lose overtime, said that "if the rules aren't blocked or Kerry doesn't win, we won't see most dramatic effects of this for a year or two."

For now, most of the changes have involved workers moving from exempt to non-exempt status because of the regulations.

"It is much ado about practically nothing," said Katharine B. Houlihan, an attorney with Morgan Lewis & Bockius, who represents employers and advises them on the Fair Labor Standards Act. "The idea that there are employers who are sitting, parsing every word and rewriting job descriptions to evade paying overtime, I just don't see that."

In fact, Sears said that it had reclassified some employees to make them eligible for overtime pay. The reclassification involved less than 1 percent of the company's 190,000-person workforce, but no sales associate would lose eligibility because of the new rules, Sears said.

The University of Missouri at Columbia said 400 to 500 employees are now earning overtime who weren't before, according to R. Kenneth Hutchinson, vice president of human resources. But some of those employees did not feel as though they won. Rather, they were upset to lose a certain status that comes with being a salaried employee.

"I think it is going to be a difficult transition," Hutchinson said. "It's certainly disappointing that some feel like it has been a takeaway."


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