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Assault on Overtime PayFact Sheet #108-1-1
The business lobby and the Bush Administration are urging the enactment of legislation that would terminate the guarantee of overtime pay after a worker labors longer than 40 hours in a workweek. On February 5, Senator Judd Gregg (R-NH), the Chairman of the Senate Committee on Health, Education, Labor and Pensions, introduced the Family Time and Workplace Flexibility Act, S. 317. This is a bill with an appealing title but appalling substance. Supporters of S. 317 claim that it would promote "family values" by giving workers more time off to be with their spouses and children. In reality, the bill would increase the power of employers and reduce the income of workers. S. 317 would permit employers to "pay" workers with compensatory time off (comptime) instead of with money, if a wage earner works overtime. Of special concern, the bill contains a provision located in Section 3(a), entitled Biweekly Work Programs and Flexible Credit Hour Programs, that would authorize an employer to have employees work 50 hours in a week without paying a cent of overtime as long as the worker does not work more than 80 hours during a two-week period. This provision effectively terminates the guarantee of overtime pay after 40 hours in a workweek. If enacted, S. 317 would destroy the mandate of cash pay at the rate of time-and-a-half, a bedrock principle that has existed since the Fair Labor Standards Act was engraved into law in 1938. Land Mines Lurk in "Family Time" LegislationProponents of S. 317 assert that the bill would give families and employers greater flexibility in balancing the demands of work and family. But the bill is fatally flawed because it fails to prevent unscrupulous employers from forcing a worker to take compensatory time off from work in place of receiving cash at the time-and-a-half rate after a wage earner works overtime. A worker who is forced by an employer to take compensatory time off when the worker wants to receive overtime pay is being required to take an involuntary pay cut! The legislation would lengthen the workweek without a corresponding increase in pay, an outcome abhorrent to those who truly value families. A major shortcoming of S. 317 is that it contains ineffective enforcement remedies. For example, language in the bill proclaims that no worker can be forced to accept compensatory time off instead of receiving time-and-a-half pay after 40 hours in a workweek. The bill states that the decision to take compensatory time off, rather than additional money, will be voluntary with the worker. But the bill fails to specify a penalty to punish employers who force workers to take compensatory time off instead of receiving premium pay at the time-and-a-half rate. A worker who was forced to take compensatory time off when the worker really wanted premium pay could challenge the employer's illegal action by complaining to the Department of Labor. But the Department of Labor is unable to enforce current violations by employers who refuse to provide overtime pay. The Wage and Hour Division of the Department of Labor, the unit which is supposed to ensure compliance with the law governing overtime pay, has a severe shortage of inspectors. The Employment Policy Foundation, a think tank supported by employers, has estimated that workers lose $19 billion a year in overtime pay due to violations of the law. S. 317 would burden the Department of Labor with substantial new responsibilities without providing the Department with additional inspectors to ensure that workers are not exploited. Another significant problem with the bill is that language found in Section (3)(c)(7)(B) would allow employers to cancel an offer to a worker of compensatory time off from work if the employer later decides that the time off would "unduly disrupt the operations of the employer." This provision is a giant loophole that would allow an employer to cancel previously agreed upon time off. If in July a worker had agreed to take compensatory time off during Christmas week to be with his family instead of receiving overtime pay, then under this provision an employer could unilaterally deny the worker the promised time off and require the worker to work during Christmas week, should the employer claim that the time off would "unduly disrupt the operations of the employer." In such an instance, the employer would have to pay the worker in money at the time-and-a-half rate for the previously worked overtime. Another problem with S. 317 is that the bill does not contain protections to assure that workers who prefer to receive premium cash pay rather than promised time off in the future are not discriminated against by employers when future overtime work becomes available. Without such protections, an employer would be able to offer overtime pay only to workers who had previously accepted compensatory time off instead of to workers who want premium cash pay. Wage StagnationS. 317 would increase wage stagnation at a time when the vast majority of working families are struggling to avoid falling behind in meeting their financial obligations. The bill would aggravate this problem by denying workers their long-standing legal right to receive premium overtime pay when they agree to help their employers by working longer than 40 hours in a workweek Supporters of the bill fail to recognize that when hourly-paid wage earners work longer than 40 hours in a week they do it for the money. Enactment of S. 317 would return public policy to the harsh era that existed in America prior to 1938 when President Franklin Delano Roosevelt signed the Fair Labor Standards Act into law. The misleading title that the sponsors have assigned to S. 317, the Family Time and Workplace Flexibility Act, would be investigated by the Federal Trade Commission for violating rules governing deceptive packaging, if those rules applied to legislation. More accurately, the bill should be entitled the Overtime Pay Elimination and Worker Exploitation Act. For further information, contact:
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