Working overtime

Sunday, August 22, 2004

The most sweeping changes in the nation's overtime pay regulations in over half a century will be put into force Monday. The move has angered labor union leaders, gratified backers of President Bush while causing barely a stir among many employers.

The Bush administration, which pushed the legislation through Congress after decades of attempts by others, says the changes in the Depression-era Fair Labor Standards Act are long overdue and will actually strengthen the overtime protection of 6.7 million workers, including 1.3 million white-collar workers who until now didn't qualify for overtime pay.

But union leaders nationally argue that the new Labor Department rules will actually limit overtime by allowing employers to reclassify workers as supervisory personnel, some of whom will not be eligible for overtime pay. The Economic Policy Institute, a liberal Washington think tank, says 6 million will lose, and only a few will get new rights to premium pay for working more than 40 hours a week.

The Labor Department says no more than 107,000 workers will lose overtime eligibility from the changes.

But no one really knows. That makes the issue harder to demonize politically, a benefit -- or a problem -- depending on the side you take.

Established in 1938, the Fair Labor Standards Act set the framework for the 40-hour workweek and guaranteed the right to time-and-a-half pay.

Mike Grote, general counsel for the Missouri Chamber of Commerce in Jefferson City, said the salary threshold was last updated in 1975 and job classifications haven't been updated in 54 years, long before there were computer-skilled jobs.

Revisions along the way have clarified many of the law's points of contention. Gone is language suggesting employers could avoid extra overtime costs by cutting the hourly wages of newly eligible workers and adding back the overtime to equal the original salary.

Sections were added to make clear that police, firefighters and other public safety officers are not exempt from overtime, regardless of rank or pay level. But labor officials say middle- and upper-ranking officers such as lieutenants still could lose overtime.

The rules address jobs that are targets of lawsuits, spelling out what duties would exempt them from overtime. They include pharmacists, funeral directors, embalmers, journalists, claims adjusters, dental hygienists and chefs.

Under the new federal rules, any salaried worker earning less than $23,660 annually is eligible for overtime pay. The old regulations guaranteed overtime for workers who earned less than $8,060 a year.

The new rule changes don't affect hourly workers or those salaried workers with union contracts that include overtime protections.

"You would think labor unions would be pleased about it," said Grote of the Missouri Chamber of Commerce.

But union leaders see the rule changes as bad for American workers who depend on overtime to pay the bills.

Herb Johnson, secretary and treasurer of the Missouri AFL-CIO in Jefferson City, worries that the new rules give greater discretion to employers in classifying employees as supervisory personnel as a way to avoid paying overtime.

The rule changes could affect 100,000 workers or more in Missouri, Johnson said.

Pay for nurses

Johnson said registered nurses could lose overtime pay under new rules that allow employers to reclassify such professional jobs.

"Some of the hospitals will be so hard up to get registered nurses, they will go ahead and pay overtime," he said. "However, that won't be the case everywhere."

Officials at both Southeast Missouri Hospital and Saint Francis Medical Center -- two of the largest employers in Cape Girardeau -- said registered nurses, classified in the new law as professionals, will continue to be paid an hourly wage and receive overtime.

"It really is not going to change anything at Saint Francis," said Terri Kreitzer, the hospital's director of human resources.

Chuck Keppler, director of human resources at Southeast Missouri Hospital, said nurses deserve the extra pay.

"They work extra days, extra hours and they should be compensated for them," he said.

Keppler said the rule changes benefit American workers by making it harder for employers to exempt workers from overtime pay.

Tom Hinkebein, a battalion chief for the Cape Girardeau Fire Department, is among a handful of the city's firefighters who may be in line for overtime pay under the rule changes, city officials said.

"That would be outstanding," said Hinkebein, who worked 70 hours last week, including fighting a major blaze. Hinkebein is paid a salary based on a 56-hour work week, but his administrative duties often have him working more hours.

As a crew chief, Hinkebein said he can't take time off one shift to make up for extra hours worked during a previous shift as might be possible in other jobs. Although he is a salaried supervisor earning more than $23,660 a year, elements in his job that require him to work in the field could make him eligible for overtime in the new law.

"With the hours we work and the shift work we work, we should be paid overtime," Hinkebein said.

David Milam, manager of human resources for the city of Cape Girardeau, said six supervisory positions in the fire department that were excluded from overtime under the old rules may now qualify for overtime pay. The new rules won't affect any other employees in Cape Girardeau city government, Milam said.

Local employers expect few changes.

"I don't think there will be much of an impact," said Steve Taylor, president of First Missouri State Bank in Cape Girardeau. "All of our people are salaried and encouraged not to work over 40 hours a week," he said.

At Southeast Missouri State University, the rule changes affect only one of the school's 1,141 full-time employees, campus officials said.

That person was in a professional, supervisory position but was making less than $23,660 annually, the pay threshold in the new overtime pay rules. To avoid having to pay overtime under the new rules, the university increased that individual's salary, said Dr. Ivy Locke, vice president of business and finance.

Buz Sutherland, director of the Small Business Development Center at Southeast Missouri State University, said local businesses don't seem bothered by the rule changes.

The Associated Press contributed to this story.

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