Misleader.org: Eliminating The Right To Overtime Pay

Economic Policy Institute, via Daily Misleader

The usual Bush policy MO: give a little with one hand, and steal as much as you can with the other. The carrot? Raising the salary floor below which a worker automatically qualifies for overtime pay. The payoff? Millions of workers lose their eligibility for overtime pay, greatly offsetting the cost of the salary floor raise.

Currently, an employee must meet three separate criteria for being eliminated from overtime pay regulations. They must be salaried employees, not hourly - the salary-basis test. The salary must be above a certain amount (currently $155 a week, $170 for "professionals") - the salary-level test. And finally, the employee's duties must be primarily "administrative", "professional", or "executive - the duties test. If all three tests are met, then the employer is free to exempt the employee from overtime pay.

Those quotation marks are important. How the government defines those terms is at the heart of the bait-and-switch of the proposed legislation.

The salary-level raise to a flat $425 is overdue - how many salaried workers do you know that make under $155 a week? The Labor Department estimates that 1.3 million will become eligible for overtime pay under this new guideline, and they have a pretty pie chart that shows how many of these people will be women and Hispanics, coming to a Limbaugh stack of stuff near you.

Which is all well and good, although the salary-level raise would be better if it were indexed for inflation. But there are other goodies deeper inside this bag.

The new definition of "learned professional" now includes workers who have knowledge that cannot be gained at a high school level. You don't need an associate's degree or the power of discretion and independent judgment in your work anymore - that correspondence course you took to be a paralegal will qualify you as a learned professional.

Assistant managers at your local Taco Bell will be surprised to know they are now "executives". And "administrative" exemptions no longer require that the "administrator" spend a majority of his time on the administrative duties. As long as you hold a position of "responsibility" with "a high level of skill or training," you can be exempt from overtime pay. Don't learn how to work the cash register, folks.

Now for the best trick of all: meeting the duties test includes determining your "primary duty." Do you have to spend a majority of your time doing your "primary duty"? Not by the Bush Administration's proposals. If you do, then your primary duty is obvious to all and enshrined in the guidelines, but if the "professional, administrative, or executive" duties fall under 50% of your time, the employer can still exempt you from overtime pay if the employer considers those tasks your "most important" duties.

Wow. That's the same logic as cutting taxes in the face of surplus and deficit spending. When this government likes a horse, they ride that poor thing as far as it will go.

Hourly employees, regardless of duties, remain fully vested in their rights to overtime pay, but with such gaping holes being established in the current guidelines, the incentive to convert hourly employees to salaried employees is growing. The DOL fesses up to 644,000 workers losing their rights in this way, a conservative estimate. The Economic Policy Institute only looked at one-third of the occupations most affected by the new proposals and came up with 2.5 million salaried workers who will lose their overtime pay outright, and 5.5 hourly workers who risk conversion. And they weren't even trying that hard.

Even using the DOL's numbers, 1,300,000 new eligibles minus 644,000 non-eligibles is...

Wait. If you already know the answer, you might not qualify for overtime pay. Keep it under your hat.