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Overtime Blues

Aired June 30, 2003 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


KYRA PHILLIPS, CNN ANCHOR: Admit it, time and a half is sweet, isn't it, which is why proposed changes of federal overtime rules are make lots of workers sour. By the end of the year, millions of Americans could find themselves working more than 40 hours a week without earning extra pay. The reason? A sweeping change to federal labor guidelines proposed by the Bush administration. We'll discuss that in just a moment.
But first, Fred Katayama joins us live from Washington to tell us who could be affected. A lot of us affected -- Fred.

FRED KATAYAMA, CNN CORRESPONDENT: Oh, yes, Kyra.

Organized labor contends the new rules would strip millions of workers from getting time and a half. They say people would work more hours at lower pay. And today, those charges 200 people to protest in front of the Labor Department.

The Bush administration's proposed rules would exempt OT premiums to white collar workers who earn $65,000 or more a year, and they would be excluded if they do not perform executive, administrative or professional duties. The administration estimates 644,000 white collar workers would lose overtime as a result.

But a study by the liberal-leaning think tank Economic Policy Institute contends the new provision would exempt double that amount.

What's more, the proposal redefines who qualifies as an executive, or professional or administrator. The Economic Policy Institute contends that would exempt 8 million people from overtime, excluding even workers who do routine tasks and little supervising, because they're employers will be tempted to reclassify hourly workers as salaried employees. The study says hundreds of thousands of dental hygienist, cooks, licensed practical nurses, bookkeepers and sales engineers could lose time and a half.

Administration backers contend change is needed, because the old rules were confusing and were made for a manufacturing-centered economy, not for the high-tech service oriented economy of today. But an AFL-CIO spokeswoman said, you shouldn't have to work 50 hours a week just because you're in an office. The public has until midnight tonight to put in their two cents on the issue. You can e-mail the Labor Department at whd-reg@phoenix2.dol-esa.gov, or fax it at 202- 693-1432. But you're asked to limit your rant or rave to 20 pages -- Kyra.

PHILLIPS: All right, Fred, what about comp time? KATAYAMA: Kyra, comp time won't be affected. Employers cannot substitute compensating time in lieu of overtime wages. If you are a wage earner, that's against the law.

PHILLIPS: All right, I've got to ask you, what do workers do now, Fred? Do they negotiate a bigger salary?

KATAYAMA: Well, we asked Jerod Bernstein (ph) of the Economic Policy Institute, and he says that employers will be taking these steps, possibly reclassifying workers in order to save money. So he says it may be counterproductive for employees to ask for a raise in this case. Others experts say it's a little too early to do anything at this point, because the public comment period is over, and the Labor Department says it will be months before they get through all that public comment.

PHILLIPS: All right, Fred Katayama, I can just imagine an overflow of e-mails and faxes coming forward.

KATAYAMA: Thousands are coming in, that's what they say.

PHILLIPS: All right, Fred, thanks.

Well, today's your last chance to comment. We'll tell you in just a moment how to express your view to the Labor Department.

First, let's discuss some more with Judy Conti of the D.C. Employment Justice center, and Ronald Bird, chief economist at the Employment Policy Foundations.

Thank you both for being with us.

Ron, let's start with you, why reclassify workers to be exempt from OT?

RONALD BIRD, EMPLOYMENT POLICY FOUNDATION: Well, what we're looking at is a regulation that was first put in place 60 years ago. It's out of step with the current labor market. It uses terms that don't even exist for occupations that don't exist anymore. We need -- we have a situation where there is a great deal of confusion, a great deal of unnecessary complexity in terms of deciding where to properly classify people.

The law has always allowed for exemption from the hourly pay requirement, and instead pay salary basis for people who are managers and professionals. This is not taking the exemption -- the pay away from anybody, this is just clarifying how the rules work so that people can make decisions about how to classify employees more simply with less burden.

The study that's been referred to talking about 8 million. That is a totally bogus number. It is based not on any hard facts, but on the application to occupational titles of the guesses made by certain labor lawyers about the percentage of people who are, or are not covered now, and would be or would not be covered then. You get five lawyers to look at it, you'll get five different opinions. You get five economists to look at it, you'll get 25 different opinions.

The problem is...

PHILLIPS: Judy, do you agree. We got get your side in here.

JUDY CONTI, EMPLOYMENT JUSTICE CTR.: Do I agree? I think the regulations, the ones that are proposed, would be a travesty. First of all, I represent primarily low-wage workers, and the administration is touting the regulations as being a tremendous benefit to low wage worker, because all of a sudden anybody that makes less than $22,000 a year is automatically going to be entitled to overtime.

Yet if those numbers were properly inflated, taking into account when they were first promulgated to what they should be today, the numbers would be well into the 30s and even the 40 thousands in certain types of jobs.

Beyond that, previously, the regs only allow people to be exempt from overtime when they exercise independent discretion and judgment. All of a sudden, the regulations are going to change to be exempting people who occupy a position of responsibility. It's a very dangerous slippery slope.

As a worker advocate, I certainly maintain that all workers have a position of responsibility in one way or the other. And this is a very dangerous precedent to set. What's going to happen is that low- wage workers are going to get promotions and title and be given somewhat hollow and meaningless responsibilities that are going to result in a pay cut for them.

In addition, because so many workers are reclassified as exempt that previously weren't and they don't have to get overtime all of a sudden, the overtime work that is available that low wage workers depend on to meet are suddenly going to be shifted to this new classification of workers, so that they are going to have their 40- hour work week compromised even more, whereas low-wage workers are going to lose the overtime that they desperately need in order to make ends meet during a recession.

PHILLIPS: And, Ron, you look at so many -- the redefining of what it means to be a professional, I mean looking here at a chef, a reporter, a nurse. I mean, these are the people that spend so much time working overtime.

BIRD: Let's take, for example, the reference to the chef in that study that you're looking at. That is a complete misrepresentation of what the proposal will do. The study from ETI (ph) said that all chefs who make over $425 a week will be classified as salaried, and that is simply not true. The wording in the proposal, if people will read the proposal, is only that truly executive-type chefs, people with a bachelor's degree, who actually are culinary artists, would possibly qualify for the salary classification, and even then, the burden of proof, the burden of proof remains always on the employer to prove that the classification does reflect a legitimate learned profession or a legitimate serious management responsibility position. We're not going to have the kind of sham classifications that Judy and others are talking about. That is just not what this is about.

PHILLIPS: Judy...

This is about helping people not hurting them.

ROBIN: Quickly, Ron, and, Judy, just final thoughts quickly. We got to wrap this up. Obviously, there's a lot of discussion about this the next final days?

CONTI: There will be. And you know, as an advocate that has worked with these regulations for over nine years now, I can tell you with firsthand knowledge that employers push every regulation to the furthest extent possible and try to get by as many exemptions as possible. The current regs are simple, they are clear cut, they are easier to follow, and they work much better than these ones will. This will be a travesty for workers.

PHILLIPS: Judy Conti of the D.C. Employment Justice Center, Ron Bird, chief economist of the Employment Policy Foundation.

Interesting to see what Congress does. It is possible they could reverse this. We'll follow it.

Both of you, thank you so much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired June 30, 2003 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Admit it, time and a half is sweet, isn't it, which is why proposed changes of federal overtime rules are make lots of workers sour. By the end of the year, millions of Americans could find themselves working more than 40 hours a week without earning extra pay. The reason? A sweeping change to federal labor guidelines proposed by the Bush administration. We'll discuss that in just a moment.
But first, Fred Katayama joins us live from Washington to tell us who could be affected. A lot of us affected -- Fred.

FRED KATAYAMA, CNN CORRESPONDENT: Oh, yes, Kyra.

Organized labor contends the new rules would strip millions of workers from getting time and a half. They say people would work more hours at lower pay. And today, those charges 200 people to protest in front of the Labor Department.

The Bush administration's proposed rules would exempt OT premiums to white collar workers who earn $65,000 or more a year, and they would be excluded if they do not perform executive, administrative or professional duties. The administration estimates 644,000 white collar workers would lose overtime as a result.

But a study by the liberal-leaning think tank Economic Policy Institute contends the new provision would exempt double that amount.

What's more, the proposal redefines who qualifies as an executive, or professional or administrator. The Economic Policy Institute contends that would exempt 8 million people from overtime, excluding even workers who do routine tasks and little supervising, because they're employers will be tempted to reclassify hourly workers as salaried employees. The study says hundreds of thousands of dental hygienist, cooks, licensed practical nurses, bookkeepers and sales engineers could lose time and a half.

Administration backers contend change is needed, because the old rules were confusing and were made for a manufacturing-centered economy, not for the high-tech service oriented economy of today. But an AFL-CIO spokeswoman said, you shouldn't have to work 50 hours a week just because you're in an office. The public has until midnight tonight to put in their two cents on the issue. You can e-mail the Labor Department at whd-reg@phoenix2.dol-esa.gov, or fax it at 202- 693-1432. But you're asked to limit your rant or rave to 20 pages -- Kyra.

PHILLIPS: All right, Fred, what about comp time? KATAYAMA: Kyra, comp time won't be affected. Employers cannot substitute compensating time in lieu of overtime wages. If you are a wage earner, that's against the law.

PHILLIPS: All right, I've got to ask you, what do workers do now, Fred? Do they negotiate a bigger salary?

KATAYAMA: Well, we asked Jerod Bernstein (ph) of the Economic Policy Institute, and he says that employers will be taking these steps, possibly reclassifying workers in order to save money. So he says it may be counterproductive for employees to ask for a raise in this case. Others experts say it's a little too early to do anything at this point, because the public comment period is over, and the Labor Department says it will be months before they get through all that public comment.

PHILLIPS: All right, Fred Katayama, I can just imagine an overflow of e-mails and faxes coming forward.

KATAYAMA: Thousands are coming in, that's what they say.

PHILLIPS: All right, Fred, thanks.

Well, today's your last chance to comment. We'll tell you in just a moment how to express your view to the Labor Department.

First, let's discuss some more with Judy Conti of the D.C. Employment Justice center, and Ronald Bird, chief economist at the Employment Policy Foundations.

Thank you both for being with us.

Ron, let's start with you, why reclassify workers to be exempt from OT?

RONALD BIRD, EMPLOYMENT POLICY FOUNDATION: Well, what we're looking at is a regulation that was first put in place 60 years ago. It's out of step with the current labor market. It uses terms that don't even exist for occupations that don't exist anymore. We need -- we have a situation where there is a great deal of confusion, a great deal of unnecessary complexity in terms of deciding where to properly classify people.

The law has always allowed for exemption from the hourly pay requirement, and instead pay salary basis for people who are managers and professionals. This is not taking the exemption -- the pay away from anybody, this is just clarifying how the rules work so that people can make decisions about how to classify employees more simply with less burden.

The study that's been referred to talking about 8 million. That is a totally bogus number. It is based not on any hard facts, but on the application to occupational titles of the guesses made by certain labor lawyers about the percentage of people who are, or are not covered now, and would be or would not be covered then. You get five lawyers to look at it, you'll get five different opinions. You get five economists to look at it, you'll get 25 different opinions.

The problem is...

PHILLIPS: Judy, do you agree. We got get your side in here.

JUDY CONTI, EMPLOYMENT JUSTICE CTR.: Do I agree? I think the regulations, the ones that are proposed, would be a travesty. First of all, I represent primarily low-wage workers, and the administration is touting the regulations as being a tremendous benefit to low wage worker, because all of a sudden anybody that makes less than $22,000 a year is automatically going to be entitled to overtime.

Yet if those numbers were properly inflated, taking into account when they were first promulgated to what they should be today, the numbers would be well into the 30s and even the 40 thousands in certain types of jobs.

Beyond that, previously, the regs only allow people to be exempt from overtime when they exercise independent discretion and judgment. All of a sudden, the regulations are going to change to be exempting people who occupy a position of responsibility. It's a very dangerous slippery slope.

As a worker advocate, I certainly maintain that all workers have a position of responsibility in one way or the other. And this is a very dangerous precedent to set. What's going to happen is that low- wage workers are going to get promotions and title and be given somewhat hollow and meaningless responsibilities that are going to result in a pay cut for them.

In addition, because so many workers are reclassified as exempt that previously weren't and they don't have to get overtime all of a sudden, the overtime work that is available that low wage workers depend on to meet are suddenly going to be shifted to this new classification of workers, so that they are going to have their 40- hour work week compromised even more, whereas low-wage workers are going to lose the overtime that they desperately need in order to make ends meet during a recession.

PHILLIPS: And, Ron, you look at so many -- the redefining of what it means to be a professional, I mean looking here at a chef, a reporter, a nurse. I mean, these are the people that spend so much time working overtime.

BIRD: Let's take, for example, the reference to the chef in that study that you're looking at. That is a complete misrepresentation of what the proposal will do. The study from ETI (ph) said that all chefs who make over $425 a week will be classified as salaried, and that is simply not true. The wording in the proposal, if people will read the proposal, is only that truly executive-type chefs, people with a bachelor's degree, who actually are culinary artists, would possibly qualify for the salary classification, and even then, the burden of proof, the burden of proof remains always on the employer to prove that the classification does reflect a legitimate learned profession or a legitimate serious management responsibility position. We're not going to have the kind of sham classifications that Judy and others are talking about. That is just not what this is about.

PHILLIPS: Judy...

This is about helping people not hurting them.

ROBIN: Quickly, Ron, and, Judy, just final thoughts quickly. We got to wrap this up. Obviously, there's a lot of discussion about this the next final days?

CONTI: There will be. And you know, as an advocate that has worked with these regulations for over nine years now, I can tell you with firsthand knowledge that employers push every regulation to the furthest extent possible and try to get by as many exemptions as possible. The current regs are simple, they are clear cut, they are easier to follow, and they work much better than these ones will. This will be a travesty for workers.

PHILLIPS: Judy Conti of the D.C. Employment Justice Center, Ron Bird, chief economist of the Employment Policy Foundation.

Interesting to see what Congress does. It is possible they could reverse this. We'll follow it.

Both of you, thank you so much.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com