Appropriators Vote to Allow Administration to Move Forward on Overtime Exemptions

The House Appropriations Committee defeated an amendment offered by the committee's Ranking Member, Congressman David Obey of Wisconsin, to block new rules developed by the Bush administration to take overtime wage and hour protection away from millions and perhaps tens of millions of American workers. The amendment was defeated along Party lines with all of the committee's 29 Democrats supporting it and 31 of the committee's 36 Republicans voting in opposition. Five Republicans on the committee (Emerson of Missouri, Kirk of Illinois, Sweeny of New York, Wamp of Tennessee and Doolittle of California) did not vote on the measure.

The Fair Labor Standards Act provides that workers should get "time and a half" if employers require them to work beyond the 40-hour work established by law. The act provides guidelines for exemptions to this requirement so that certain classes of employees (i.e. managers) can be paid weekly or monthly salaries rather than hourly wages. These guidelines, however, are implemented by regulation and the Bush administration has seized on that authority to dramatically scale back on both the requirements placed on employers and the protections provided to workers. The new rule was published in April and will go into effect on August 23 (as a special Labor Day present) if Congress does not act to block it.

If the rules are not block, millions of workers will lose overtime protection and the additional pay that is due to them. As study by Ross Eisenbrey of the Economic Policy Institute looked a ten of the many groups of workers affected by the new regulation and identified more than 6 million workers within those groups whose overtime protection would be eliminated. These include more than 1.4 million low salaried supervisors and 548,000 hourly paid supervisors who could be switched to salaried pay so that the employer could be exempted from overtime requirements. Also included are 900,000 workers who have been reclassified as professionals even though they may not even possess a college degree. The study estimates that at least 30,000 preschool teachers will be exempted.

Obey told the Appropriations committee "the administration should not be allowed to chisel away the earnings of working American families." He noted that the amendment that he was offering was identical to the one that he and Congressman George Miller (D-CA) offered last year and which prevailed on the House floor by a vote of October by a vote of 221 to 203. Obey expects to offer the amendment when the Appropriation measure reaches the House floor which could be as early as next week.

The timing of the administration's attack on overtime pay could not come at a worse time for efforts to sustain the struggling economic recovery. Consumer demand is clearly weakening with retail sales suffering a 1.1 percent drop in June. The bottom line is that the less workers make the less they are able to buy. Several recent studies by the Center for American Progress have noted the steady monthly decline in average weekly earnings of American workers even though administration's new rule on overtime pay has not yet gone into effect. All this has occurred during a period of record growth in corporate earnings.

Scott Lilly is a senior fellow at the Center for American Progress.