Protecting Overtime Pay
May 1st, 2005
The Fair Labor Standards Act of 1938 (FLSA) established the guarantee that American workers would have a normal workweek of 40 hours. For most workers, it guarantees the right to overtime pay - "time and a half" - for
each hour beyond 40 worked in a week. The FLSA creates a financial disincentive for employers to substitute overtime for job creation - a particularly important goal in this economic downturn. Further, the FLSA helps
workers balance work, family, and community responsibilities by protecting them against abusive overtime.
Overtime protection for many middle-class workers is now threatened by new rules promulgated by the Bush administration. Ignoring a national outcry from working families and bipartisan opposition in Congress, the Bush administration's regulations that took effect in August 2004, eliminated overtime rights for many
workers, including employees earning as little as $23,660 per year.
Workers in danger of losing their overtime protection include some journalists classified as "creative professionals," some sales representatives, workers in network and database administration in the computer
industry, and other white-collar and blue-collar employees with minimal management responsibility. Employees classified as "team leaders" could lose overtime rights, even if the employee does no supervision. For the first time, the rules exempt employees earning over $100,000 from overtime protections.
The Bush administration has consistently underestimated the number of workers who will lose overtime as a result of the rule changes. Despite proponent's claims that the new rules would expand overtime rights to previously covered workers, the Bush administration's original proposal actually instructed employers in ways to reduce hourly wages of newly covered employees to avoid paying them more.
Working families depend on overtime to supplement the family budget. According to the Economic Policy Institute, overtime pay makes up about one-fourth of the weekly earnings of workers who earn overtime, an average of $161 per week.
CWA Position
CWA opposes any effort by the federal government to take away any workers' overtime protection. CWA fully supports genuine efforts to extend overtime protection to more workers.
The 65 year-old Fair Labor Standards Act stands as one of the great achievements of working people. It assures employees a 40-hour workweek, providing time beyond earning a living to care for families, engage in leisure activities, and contribute to community affairs. It provides some financial incentive to employers to create jobs rather than impose mandatory overtime in response to increased demand - a particularly important objective with more than 8.3 million unemployed Americans today.
Rather than erode these protections, it is time to expand upon FLSA overtime coverage. Many employers impose abusive amounts of mandatory overtime, creating serious hardship for employees in meeting family and other obligations. For these employers, "time and a half" after forty hours is no longer a financial disincentive. Americans work more hours than workers in any other industrialized country, including Japan, according to the International Labor Organization. The Economic Policy Institute calculates that middle-class families with children have increased their work hours by 20 percent over the past two decades.
Other countries such as France and some employers have responded to high unemployment rates accompanied by rising worker productivity by reducing the standard workweek, in effect spreading the work among more employees. It is time for U.S. policymakers to consider reducing the standard workweek.
At a minimum, we must preserve current overtime protections after 40 hours, and expand those protections to currently ineligible workers.
