Obama Seeks to Restore Overtime Pay for Millions of Workers Denied Under Bush-Era Rules

Pete Souza. The Official White House Photostream/Wikimedia

In 2004, President George W. Bush, at the urging of business groups, used his executive powers to change overtime eligibility rules and allow businesses to deny overtime for millions of workers. Tomorrow, President Barack Obama is expected to announce that he will direct the U.S. Department of Labor to update overtime eligibility rules to restore overtime protection that workers have lost to inflation since 1975.

Under federal overtime regulations, workers who earn less than a certain salary level are generally entitled to overtime protection. For decades after enactment of the federal overtime law in 1938, this salary threshold was updated every few years as a routine matter. However, the last regular adjustment to the salary level was made by President Gerald R. Ford in 1975. No further adjustments were made for the next 29 years, and as a result, workers’ overtime protections have been steadily eroded by inflation.

Obama is expected to announce tomorrow that the Labor Department will update the salary threshold for overtime eligibility. Above this salary level, workers may be denied overtime protection if they are considered executive management, administrative management or professionals. Below this salary level, workers cannot be denied overtime protection for these reasons.

However, it is not clear how much the president will propose to increase the salary level. The Economic Policy Institute (EPI) has recommended an increase to $970 per week ($50,440 per year), which would restore all of the overtime protection lost to inflation since 1975.

New York and California already require companies to pay overtime to anyone earning less than $600 and $640 per week, respectively. Those salary levels are set to increase to $675 and $800 per week by 2016.

The current federal threshold of $455 per week—or $23,660 per year—is ridiculously low. It is barely above the federal poverty level for a family of four. A White House official explained that overtime protections have eroded to such an extent that millions of workers who should not be denied overtime protection are being left unprotected.

For example, a convenience store manager or a fast-food shift supervisor or an office worker may be expected to work 50 or 60 hours a week or more, making barely enough to keep a family out of poverty, and not receive a dime of overtime pay.

EPI Vice President Ross Eisenbrey says many of the workers who would benefit from restored overtime protection are insurance clerks, secretaries, low-level managers, social workers, bookkeepers, dispatchers, sales and marketing assistants and employees in scores of other occupations.

As the rules stand now, an assistant manager at a fast-food restaurant who spends 95 percent of his (or her) time cooking fries, running a cash register, sweeping floors and moving supplies into and out of the freezer can be denied any overtime pay and work 60 or 70 hours a week if his salary is at least $23,660 a year. Because he is exempt [from overtime protection], the hourly rate of his salary can fall below the minimum wage; “executives” are excluded from minimum wage protection, too.

Last December, President Obama called attention to growing economic inequality in America and declared that making sure the economy works for working people is the defining challenge of our time and drives everything he does as president. With Republicans blocking the legislative agenda he campaigned on in 2012, the president has vowed to act within his executive powers to make sure the economy workers for everyone. Today’s announcement follows on the heels of his January executive order requiring federal contractors on all new or renewed contracts to pay their workers at least $10.10 an hour.

Also Democrats in Congress and the president are attempting to raise the federal minimum wage to $10.10 per hour. If you think workers deserve a raise, sign this petition.

Reposted from AFL-CIO NOW

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Dear David: Underpaid for Overtime

Question:

Hi, David. I work for a home health care franchise that enables seniors to continue living at home. I’ve been told that since my employers have a “temporary part-time” tax status, they do not have to pay overtime. I work 12 hours daily at least five days a week. Sometimes we have to pick up shifts when other staff “no-show, no-call.” We work in two-week pay periods 120-140 hours and do not get any overtime. We only make $9 per hour. I eagerly await your instructions concerning this matter. Thanks in advance.

— Underpaid for Overtime, Ohio

 

Answer:

Caring for seniors is important work, but it can also be challenging—especially when you’re at it for 12 hours a day! That sounds truly exhausting, and I’m sure it’s especially frustrating when you feel like you’re not getting paid what you deserve.

As I’m sure you know, $9 an hour isn’t a ton of money. It’s more than minimum wage, but if minimum wage had kept up with the cost of living over the past 40 years, it would be $10.52. You’re doing important work, and $9 an hour is tough to support yourself—or your family—on.

It’s not just the pay scale that’s tough to stomach here. You shouldn’t have to rely on working 60-70 hours per week because your employer doesn’t pay you enough, and you really shouldn’t be forced into working 60-70 hours because your employer is apparently unwilling to staff up properly. You’re right to question the status quo.

I’m not really sure what your employer means by “temporary part-time tax status” and how it would affect overtime. It might be good just to note that, although there are several types of exemptions, the Fair Labor Standards Act overtime requirement applies to most workers, and you’ll probably want to look a little deeper into whether you are covered rather than just taking the employer’s word for it. (If you think you need professional legal advice on this question, one of the benefits of being a member of Working America is access to a free 30-minute consultation with an attorney. You can learn more here.)

Let’s take another approach to this, though. Let’s say that your employer does have some kind of exemption to overtime. That doesn’t mean you have to take it or leave it—you could take a page from other home care workers in a similar situation. I’m sure you’re not alone in being fed up, so one of your options is to get together with your co-workers and strategize ways you can get your employer to meet your interests. If enough of you share the same concerns and are fed up with low pay, long hours, short staffing or anything else—it may be time to get organized. You’ll have a lot more strength acting together than individually. You can start here: use FixMyJob.com to diagnose the problem and OrganizeWith.Us to make a plan.

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Do Not Be Fooled by Cutesy Rhetoric on Comp Time

Trying her best to sound like a Hallmark card, Rep. Virginia Foxx argued on a local North Carolina news station in favor of a bill that would end overtime pay for hourly workers as we know it: “It’s important to have enough money from your paycheck,” she told WFMY News, “but money can’t buy time. Many parents would like to have the time with their children.”

While the bill, the “Working Families Flexibility Act,” sounds like it gives you more time, here’s what it actually delivers: an interest-free loan to your employer, and a few vacation days that your employer has complete control over.

If you’re an hourly worker, scheduling is a huge issue. And while the idea of time off in lieu of time-and-a-half overtime pay sounds tempting, this bill does not resolve any problems you may have with your schedule. The bill clearly states that employers can deny requests for time off if it is not made “within a reasonable period” or if your time off “unduly disrupts the operations of the employer.”

Rep. Virginia Foxx is right about one thing: Many parents would like to have more time to spend with their children. But under the Orwellian-named “Working Families Flexibility Act,” your boss still decides when you can take that time and when you can’t. Meanwhile, he or she can work you 50 or 60 hours a week and pocket the overtime you would have otherwise received.

Yes, the option of overtime instead of comp time still remains. But there is nothing stopping your boss from treating you differently (giving you a bad schedule, straight-up firing you) if you take that option. “The worker shouldn’t have to have that sort of pressure on them,” said Catherine Medlock-Walton, our Member Coordinator in North Carolina.

So don’t be fooled by this talk of “family” and “children” from politicians like Rep. Foxx.

If they truly cared about our families, they wouldn’t block bills allowing workers to earn sick paid days, and take time off to care for a sick child.

If they truly cared about our families, they wouldn’t oppose increases in the minimum wage, so parents wouldn’t have to work two or three low-wage jobs in order to care for their children.

And if they truly cared about our families, they would not have voted 33 times to repeal the Affordable Care Act, which vastly improves the ability of parents and children alike to afford health insurance and not be denied for preexisting conditions.

There truly are pieces of legislation which would help working families have flexibility. Unfortunately, and confusingly, the so-called “Working Families Flexibility Act” is not one of them.

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Members of Congress Who Work Less Than Half of the Year Pass Bill to End Your Overtime Pay

On Thursday night, in their continuing trend of demonstrating no interest in the well-being of American workers, 223 members of the U.S. House of Representatives voted to end overtime pay for as we know it for hourly workers.

HR 1406, the hilariously named, “Working Families Flexibility Act,” would replace time-and-a-half pay for hours worked past 40 hours with a “comp time” system that favors the employer. As the video above explains, “comp time” sounds like you’re getting time off to spend as you see fit, but in fact allows your boss to decide when you take your days off – and when you don’t.

(Here are 7 things you should know about “comp time.”)

If your boss decides that your request for days off “unduly disrupts the operations of the employer” they have the right to reject it. If your boss decides that your request was not made “within a reasonable period,” you can’t take your vacation.

So instead of getting paid extra for working more than 40 hours a week, as we’ve done for decades, you get some days off that your employer has complete control over. And yes, you can still take the option of overtime pay, but what’s to stop your boss from treating you differently because of it? (Nothing.)

To review: The Working Families Flexibility Act provides less flexibility to working families. Classic bill naming!

What’s sickening about this vote in the House is that three Democrats voted for the bill along with all but 8 Republicans: Tim Matheson of Utah, Henry Cuellar of Texas, and Collin Peterson of Minnesota. The House Republican caucus has continuously demonstrated their lack of concern with American workers (33 votes to repeal Obamacare, anyone?) and it’s a shame that these three so-called “representatives” decided to cross the aisle on this harmful, misguided bill.

But in general, we should keep this vote in mind next time those 223 members of Congress come back around asking to get “rehired” in November 2014. After all, Congress operates less than half of the year, and yet they earn an exorbitant salary for their troubles – paid by you, the taxpayer.

They might think that our bosses should completely control how we spend our time. Don’t forget, though: we are their bosses. And if they don’t change their attitude and their work ethic, a pink slip might be in order.

Click the image to share on Facebook.

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‘Working Families Flexibility Act’ Doesn’t Give Flexibility or Support to Working Families

by Rep. Gwen Moore and Arlene Holt Baker

This article originally appeared at The Huffington Post.

In a perfect gift for mothers, just short of Mother’s Day, House Republicans have once again introduced legislation with a charming title and a potentially devastating impact for working women and families. According to the bill’s sponsors, the “Working Families Flexibility Act,” or H.R. 1406, would give employees the “freedom” to determine work schedules and time off. In reality, this bill would provide more work and less pay.

Working families need and deserve greater flexibility in meeting family and work needs. However, the “Working Families Flexibility Act,” on the floor of the House of Representatives this week, doesn’t do anything to promote greater flexibility for working families. This legislation, proposed by House Majority Leader Eric Cantor and Rep. Martha Roby, would allow employers to pay their workers nothing extra for overtime work, other than the potentially empty promise of compensatory time—”comp time”—that can only be used at the employer’s discretion. H.R. 1406, cloaked in the positive language of “choice,” is really just another attempt by Republicans to get rid of paid overtime.

Backers of the bill are proudly calling this legislation “family friendly” and touting its benefits for working women. But we fear they are underestimating women’s ability to know a falsehood when they hear one. The supporters of this bill claim that employers need more “flexibility” to manage work schedules and give workers time off. But employers already have the flexibility to schedule any kind of flexible work hours and to give their employees paid or unpaid leave whenever they want. By giving employers the flexibility not to pay overtime, this “comp time” bill is just another Republican gimmick that would ultimately erode hourly workers’ ability to both pay their bills and care for their families.

At least 63 million private-sector workers are required to be paid time-and-a-half for hours worked beyond the 40-hour workweek. Under H.R. 1406, workers who work overtime would never see a bump in their paycheck and would earn less take-home pay. The “choice” to take time off sounds nice, but as many working parents and people of color know too well, calling something a “choice” assumes there are viable options. For many working families, taking home less pay at the end of the day means less money to cover rent, education costs, medical bills and other living expenses. The “choice” to take unpaid time off is not a choice at all.

The 40-hour workweek, as we know it, came from the Fair Labor Standards Act (FLSA) of 1938. To ensure that workers can spend more time away from work, the FLSA discourages employers from demanding overtime by making overtime more expensive. By contrast, H.R. 1406 would encourage employers to demand longer hours because overtime is made less expensive. That’s because employers would be able to pay workers nothing at all for overtime work at the time the work is performed and could schedule comp time off at no extra cost to them (for example, during less busy periods when co-workers can pick up the slack). So, when employees request comp time, they essentially become lenders to employers. For example, a worker earning $12 an hour and banking the maximum amount of hours (160) would be giving an interest-free loan of $1,920 to his or her employer.

At a time when workers are already working harder for less, those who rely on overtime to make ends meet could face even more financial challenges. The kind of support that working families are looking for would be available by strengthening their ability to collectively bargain on the job for higher wages, safer workplaces, better health care and paid time off options. Working families deserve better than H.R. 1406.

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7 Things You Should Know About “Comp Time” and the Working Families Flexibility Act

Say what you will, but anti-worker politicians are good at giving deceptive names to things. “Right to work” takes away your rights at work. “Paycheck protection” puts your wages at risk. And who could forget Paul Ryan’s plan to “strengthen Medicare” which ends Medicare as we know it.

House Republicans are pushing the “Workplace Families Flexibility Act of 2013,” which they claim would allow busy working parents to spend more time with their kids. That’s bogus. The bill replaces the 40-hour work week with a “comp time” accrual system that would allow employers greater control over their hourly employee’s schedule.

What’s worse? The bill ends ”time-and-a-half” overtime pay for hourly and non-exempt workers as we know it, giving renewed incentive for businesses to work their employees as long as they want with near impunity.

In other words, the bill does the opposite of what House Republicans say it will.

Confused? That’s exactly what they want. So here are 8 things you should know:

“Comp time” undermines the 40-hour work week. Quick history review: in 1938, the Fair Labor Standards Act (FLSA) became law. We say it “established” the 40-hour work week, but really it just “encouraged” it, by telling employers that for any hours worked past 40, workers had to be time-and-a-half and receive it in their next pay period. The idea was you get eight hours at work, eight hours to sleep, and eight hours to do whatever you want. Another goal of time-and-a -half pay was to give employers a financial incentive to hire more workers when they have more work, instead of forcing workers already on the job to work beyond their scheduled hours.

With “comp time,” employers are encouraged to do the opposite. Making overtime less expensive to employers means more workers being scheduled for 50 or 60-hour shifts. Which means less time with your family – not more.

“Comp time” encourages mandatory overtime – and ends overtime pay as we know it. Instead of time-and-a-half pay for hours worked past 40, workers would get “comp time,” hours of time off to be taken later. Employers benefit because they don’t have to pay overtime, plus, they can have you use your comp time in a way that won’t cost them extra (during less busy periods, etc.).

According to the bill, individual employees have the “choice” between comp time or overtime pay. Since comp time saves the employer money, what is stopping them from inducing workers, subtly or not, into choosing comp time? They could give the “comp time” workers better shifts and better treatment, and they could even train workers not to take the overtime options – in the same way that Target and other stores train workers not to join unions.

Don’t be fooled: this is a pay cut. Again, having hours off “at some point” sounds nice. But overall, workers’ take home pay will go down, because that supplemental income you would’ve had from working overtime will disappear. Besides, depending on your schedule, you could get to December 31 without having the chance to use your accrued comp time, at which point you are left with no time off and no extra pay.

It has “flexibility” in the name, but provides less flexibility to workers… Employers already have the option to offer their workers more flexible schedules – most just choose not to. The only difference is that with “comp time,” workers don’t get the time-and-a-half pay they would with overtime. “Comp time” isn’t “paid leave” in the traditional sense, because now the employee is the one paying.

…and more flexibility to employers. Say you want to take your comp days off. You go to your boss and request an afternoon off to take care of a sick child, for instance. Under “comp time,” the boss can deny your request outright. Why? Because they can claim that your request “unduly disrupts the operations of the employer” or that the request was not made “within a reasonable period.”

So you’ve gone from a job with overtime pay to a job with unlimited shifts and no extra pay, and you can’t take days off when you want. And if you take the overtime option, your boss can treat you worse because of it. Thanks, Working Families Flexibility Act!

Kills jobs. People say this phrase all the time, “job-killing this,” “job-killing that.” But comp time sends the message to employers that it’s cheaper to work your current employees harder and longer than ever before rather than hire new people. When you take away the primary incentive to hire more people that literally, not figuratively, kills jobs.

There’s a better way. How about this: we don’t touch the 40-hour work week. Eight hours work, eight hours sleep, eight hours to do what you will – it’s a good system.

The problem remains, though, that many workers don’t even have right to earn paid leave to use when they get the flu, need to care for a sick child, experience a traumatic event, or even attend their kid’s school play.

That’s why Senator Tom Harkin (D-IA) and Representative Rosa DeLauro (D-CT) introduced the Healthy Families Act, which would allow workers to earn up to seven job-protected paid sick days each year. Workers would earn one hour of paid sick leave for every 30 hours work – no one gets something for nothing. You can learn more about that bill here, and send a message to Congress to pass it here.

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