Millions of Workers May Lose Overtime Pay

August 19, 2003

New federal regulations, scheduled by the Bush administration to take effect later this year, could result in 8 million workers becoming ineligible for overtime pay.

Under the current regulations of the Fair Labor Standards Act (adopted in 1938) nearly 80% of all workers are guaranteed the right to overtime pay - that is time and a half - for every hour worked past the normal 40-hour work week. But the Bush administration is going ahead with drastic changes in the eligibility criterion of the FLSA which will deny overtime pay to millions of workers.

The most important change will be in the "duties test" used to determined which workers are eligible for guaranteed overtime. Current regulations state that a worker cannot be denied overtime pay unless her/his duties are primarily "administrative," "professional," or "executive."

Under the new rules, the title of "professional employee" could be applied to any worker whose job requires knowledge that cannot be attained in high school. Similarly hundreds of thousands of "lead employees," "set-up" workers in factories and others will be categorized as "executives." And even if employees spend only a fraction of their time on such "executive" or "professional" tasks, they will still be ineligible for overtime if their employer claims that their "most important duty" is "executive," etc. Thus, for example, workers who spends most of the day stocking shelves and cleaning can be exempted from overtime pay if they also spend some time handling customer complaints or ordering merchandise.

In a study of the probable effects of the new regulations, the Economic Policy Institute, estimates that as many as 2.5 million salaried employees will lose the right to overtime pay and that another 5.5 million hourly workers may well be reclassified as salaried workers in order to be denied overtime under the new regulations.

Some of the workers most likely to be effected include: LPNs, medical technicians, dental hygienists, physician assistants, laboratory technologists and technicians, experienced cooks and chefs, set-up machinists, firefighters, draftsmen, surveyors, paralegals, bookkeepers, technical writers and others.

These new regulations are also expected to result in the elimination of hundreds of thousands of part-time jobs. Since employers will be able to get extra work out of regular, full-time employees without paying overtime, the need for part-time workers will decline.

At the same time, Congress is considering a number of bills which also undermine the right to overtime. Several proposed laws would make it easier for employers to pay for overtime with "comp time" (time off) rather than time and a half wages. Other proposals would require employers to pay overtime only after an employee had worked 80 hours in a two-week period rather than after 40 hours in one week.

Ever since the emergence of capitalism, the capitalists have tried to get the maximum amount of work out of the fewest possible workers and at the lowest possible pay. Amongst other things, the workers and capitalists have been locked in a continuous battle over the length of the working day. For 150 years, workers have struggled for the 8-hour day and 40-hour week in order to limit their exploitation, protect their health, and guarantee that at least some of their life remained at their own disposal. By forcing the government to pass laws guarantying overtime pay, workers have restricted the scope of capitalist exploitation and increased their wages.

The attack on laws guarantying overtime pay is part of a generalized offensive against the rights gained by workers over generations.