Currently there are 10.7 million people in jobs where it’s unclear whether they are to be paid overtime, such as loan officers, athletic trainers and pilots. Under the proposal, some workers who are at low pay levels would gain overtime eligibility, while some who earn more than $50,000 a year would lose it. A person earning more than $65,000 a year likely won’t be eligible for overtime.
“Everybody is not going to be happy,” said Tammy McCutchen, a Labor Department lawyer overseeing the changes, which have been in the works since the Carter administration. She said the revisions aren’t aimed at denying workers paid overtime but at protecting low-wage workers from abuse; the act’s overtime rate was set at time-and-a-half to deter managers from overworking employees.
The pay cutoff below which workers automatically qualify for overtime, currently $155 a week, has not been raised since 1975. In the proposal, it would go to $425 a week, or $22,100 a year, providing overtime protection for an additional 1.3 million low-wage workers.
Critics contend the proposed changes are so murky that employers will be tempted to shift job duties away from people who are eligible to collect overtime to those who are not.
“They are certainly giving employers an enormous amount of wiggle room,” said Eileen Applebaum, a labor economist and director of the Center for Women and Work at Rutgers University.
‘Free’ overtime will lead to abuse
“If overtime is free to the employer, it is going to be overused,” Applebaum said. She cites a study by the center showing that only 20 percent of the workers eligible for overtime work more than 40 hours a week, but that 44 percent of workers who are exempt from overtime pay work overtime.
Employers say they are desperate for clarity. Last year, wage-and-hour class-action lawsuits outpaced class actions charging discrimination. In one of the larger awards in recent years, a California jury slapped Farmers Insurance Exchange with a $90 million judgment for not paying its claims adjusters overtime for years. The company said it believed it was correctly exempting its adjusters as professionals.
The Labor Department’s McCutchen predicts a deluge of lawsuits as employees and employers press for clarifications once the new rules go into effect. John Billhorn, a Chicago attorney who represents employees in lawsuits, said: “It’s just going to create new areas of fog.”
Still, some believe the proposed changes are helpful.
“Just getting a set of regulations that reflect today’s current understanding of the workplace, I think, will make it easier for those responsible for administering the regulations,” said Tim Bartl, associate general counsel and director of corporate relations for LPA Inc., a public policy advocacy group on human resources issues. But he adds, “It is difficult to determine who is not exempt.”
One area of confusion is likely to be exemptions for workers who “hold positions of responsibility or of substantial importance to the business.”
In Chris MacBain’s case, there already is confusion.
“The way it was explained to me is if you’re responsible for the way you get your job done, you’re not necessarily qualified for overtime,” said MacBain, who has an associate’s degree in technology from a trade school.
The past four years he’s worked as a modelmaker at a Chicago industrial design firm, sculpting prototypes for consumer products out of plastic and foam based on blueprints drawn by someone else. Two years ago, his employer switched him from an hourly worker, eligible for overtime pay, to a salaried worker.
Now MacBain, 32, said he wonders if he was eligible for overtime pay all along and how the proposed changes could affect his future eligibility. He also believes “it’s important to define what is white collar and what is blue collar.”
While he is convinced he is a blue-collar worker, MacBain said he went along with his employer’s decision even though he sometimes works alongside private contractors who are paid overtime for doing the same work he does. Yet MacBain said he has no regrets. “I definitely chose the job security over the potential for overtime.”
And there are some who question why white-collar workers are excluded from overtime pay.
“There’s no reason why a white-collar worker should be deprived of overtime pay,” said Christine Owens, a public policy lawyer for the Washington-based AFL-CIO, the federation that represents 13 million workers in 65 unions. “The Labor Department may be taking us in the wrong direction.”
For some workers, losing overtime eligibility could mean the difference in being able to afford private school for their kids or moving into a nicer neighborhood. They might complain about long hours but never about the bump in their paychecks. Overtime earnings fuel their lifestyles, and for some the prospect of not getting overtime pay is unthinkable.
Consider Jacqueline Voss, a nurse who works the afternoon shift at a Detroit-area hospital and who questions whether she could afford to remain a nurse if she were not paid overtime. She averages 50 hours of work a week, with up to 64 hours of on-call time, and says hospital schedulers are always looking for nurses to work weekends.
“If I sign up this weekend,” Voss said, “I will have worked five of the last six weekends.”
Seven nurses quit in the last year because of the grueling schedule. “Work and not get paid for it? We wouldn’t do it.”
Yet under the Labor Department’s proposal, Voss might be exempt at times from overtime pay. The reason: Voss sometimes acts as a supervisor of nurses sent by temp agencies to cover staff shortages.
“I’m the only afternoon girl. So I’m the one who’s supposed to take care of it,” said Voss, a recovery room nurse who assigns patients to beds and facilitates communication between hospital floors. “I have a position of responsibility, but every RN does. I have three more people above me.”
Recently, Voss had to call in a nurse at 10 p.m. who already had worked a 12-hour day to assist with a medical procedure on a woman who had miscarried. She said she cannot imagine trying to get help at that hour if nurses did not earn overtime.
Officials with United American Nurses, a union, said they are still trying to determine how nurses would be affected by the proposed changes. Nursing already is struggling with issues of mandatory overtime and severe personnel shortages.
The proposed changes would not affect overtime agreements that are part of union contracts.
The Labor Department’s proposed changes, unveiled in March and subject to public comments until June 30, also set off alarm bells in the tech industry. Many technology workers are paid straight time instead of time-and-a-half as a result of a federal law passed in 1990.
Andrew Schultz, president of Pro Unlimited, an adviser on overtime issues to Fortune 500 technology companies, said such workers now face losing that extra pay as well.
“A lot of these people getting straight time for overtime will pass as true exempt workers and not get overtime at all,” Schultz said.
In some cases, tech workers already are paid salaries but get extra pay for working weekends and wonder whether that pay will evaporate.
One such worker is Donna Moe of Monee, Ill., who earns an extra $600 to $800 a week when she works on Saturdays or holidays monitoring a mainframe computer and production control systems at a bank. She is paid a salary but earns overtime through an arrangement with her employer, she said.
“We voted for overtime pay in lieu of comp time,” Moe said. “Now, that overtime is so sweet. It really ends up being a huge chunk. That would be a bummer to lose it.”
So far, police department unions seem to be the most vocal in challenging the Labor Department’s proposal.
The International Union of Police Associations estimates that 200,000 midlevel police officers, such as detectives and lieutenants, will lose about $150 million in overtime pay. In addition, the association believes that if these positions are exempt, they also will be exempt from accruing compensatory time off.
The implications for loss of extra pay or time off are far-reaching, said DeBraska, the Milwaukee detective, who is detached from the department while serving as president of his police union. He reflects on the shooting case that was solved during a 13-hour stretch after his shift technically had ended.
“If I had not devoted the overtime to that case immediately after the seizure of the weapon, the arrest probably wouldn’t have been made,” he said.
DeBraska, who as a detective earned more than $65,000 a year, also said he technically might be exempt when he sometimes leads teams during investigations, although he does not consider himself a manager.
The Labor Department is “hitting the most highly motivated people in our department,” DeBraska said. “That’s the wrong message.”
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