New Overtime Rules Protect U.S. Workers

August 24, 2004By Elaine Chao

Overtime pay matters to American workers and their families, and as of Monday, millions more of them gained overtime rights.

Until now, outdated regulations left millions of workers without the guaranteed overtime protections they deserve. Now, after more than two years of careful deliberation with extensive input from the public, the Department of Labor’s reforms to white-collar overtime regulations are about to take effect. And while the new rules will result in America’s businesses paying more money to their workers, they will give employers much-needed certainty and reduce the enormous number of lawsuits these 50-year-old regulations create.
Although overtime regulations can be a very complicated subject, the basics of the new reforms are quite simple.

Under the old, outdated regulations, workers earning as little as $8,060 could be denied overtime. The new overtime security rule nearly triples this salary threshold, so that workers earning less than $23,660 per year are guaranteed overtime protection no matter what they do or what their job title is. Approximately 6.7 million workers will benefit from this change: 1.3 million workers who did not have a right to overtime under the old regulations, and another 5.4 million whose right to overtime was uncertain or dependent upon the whim of the courts.

The new overtime security rules, for the first time, also offer explicit guarantees of overtime protection to many workers earning more than the $23,660 threshold, including blue-collar workers like carpenters, electricians, mechanics, plumbers, iron workers, operating engineers, longshoremen and laborers, as well as workers who receive overtime under a union contract.

Licensed practical nurses and first responders, such as police officers, firefighters and emergency medical technicians also receive greater protection under the new regulations. Any workers paid on an hourly basis will continue to be guaranteed overtime pay no matter how much they earn, what job they perform, or what their title is.

Because the old regulations hadn’t been changed in decades, they were difficult to understandand apply in today’s economy, meaning that it was often impossible to determine who should receive overtime. The result was an explosion in lawsuits.

The new rules, by contrast, are significantly shorter, based on today’s workplaces, and incorporate current court decisions to make it easier to determine overtime eligibility.

This new clarity means that workers won’t have to resort to the courts to get the overtime they deserve and employers can devote money to building their businesses and paying workers, instead of enriching lawyers.

Yet some in Congress are attempting to undermine the new worker protections established by these reforms. Special interest groups have tried to discredit the new rules for political reasons.

Should these cynical tactics succeed and Congress roll back these overdue reforms, workers will be unjustly denied overtime, employers will still be saddled with lawsuits and the new worker protections contained in the updated rules will be swept away.

Rolling back these new protections would be disastrous for workers, especially now. According to a recent news report, a number of companies are preparing to treat more of their workers as eligible for overtime under the new rules, and a new court case,Robinson-Smith v. Geico, found that many claims adjusters would be eligible for overtime under the reforms—a ruling, by the way, that directly contradicts what the fear-mongers have been claiming.

Every administration since President Jimmy Carter has recognized the need for updating the overtime rules, but special interest politics and partisan gridlock have always won out—until now.

This is not the time for Congress to turn back the clock on America’s workers.
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