[Congressional Record Volume 149, Number 137 (Wednesday, October 1, 2003)]
[Senate]
[Pages S12213-S12216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FAIR LABOR STANDARDS ACT OVERTIME RULES

  Mr. REID. Mr. President, this is a land of opportunity. Americans 
know if they are willing to work hard, they can realize their dreams. 
Hard work built this country and hard work is what has enabled 
generations of Americans to own a home, make a stronger community, and 
give their children a good education.
  Americans have always been willing to work hard to reach their goals, 
and we are working longer hours today than ever before. Almost one-
third of the labor force regularly works longer than a 40-hour week and 
20 percent work longer than 50 hours. Fifty years

[[Page S12214]]

ago, as part of the Fair Labor Standards Act, we established the 
principle of overtime pay for those who work more than 40 hours a week. 
This recognized the value of hard work and rewarded those who worked 
the hardest. Families who work hard depend upon overtime pay. For the 
families who do earn overtime, it makes up one-fourth of their total 
salary.
  Having said all this, I cannot understand why the President is 
proposing to change the rules on overtime pay. His proposal would 
eliminate overtime wages for 8 million workers--nurses, firefighters, 
police officers, flight attendants, preschool teachers, cooks, 
secretaries, and fast-food shift managers. This proposal would amount 
to a pay cut for these hard-working families. It would also mean fewer 
jobs because companies would simply force their employees to work 
longer hours without paying overtime instead of hiring new workers.
  In the current economic situation, when millions of Americans are out 
of work, it does not make sense to do something that will stifle the 
creation of new jobs. Even for the workers who would still qualify for 
overtime, this is a bad rule. Why? Because big companies will force the 
overtime-exempt workers to put in longer hours and cut the hours of 
those who qualify for overtime.
  Mr. KENNEDY. Will the Senator yield on that point?
  Mr. REID. I am happy to yield to my friend from Massachusetts.
  Mr. KENNEDY. I noticed an editorial in the Washington Post yesterday 
which pointed out:

       Despite a veto threat from President Bush, the House should 
     vote to block the rules. While the overtime regulations need 
     updating, the administration proposal tilts too far in the 
     direction of employers. It ought to be redrawn in a more 
     balanced way. . . . The new rules would give employers far 
     more freedom to disqualify employees.

  I think that is what the Senator from Nevada is saying, as I 
understand it, that those rules that have been drafted by the 
administration are one-sided. They are going to work to the 
disadvantage of employees just at a time when we know American workers 
are working longer and harder than any other industrial nation in the 
world, as this chart shows, particularly with regard to women who are 
out there, who have joined the workforce.

  This is in 1979. Middle-income mothers worked 55 percent more than 
they did 20 years ago, 895 hours compared to 1,388 hours. American 
workers are working longer hours. They are working harder. The mothers 
of small children are working longer and harder to make ends meet in a 
difficult economy. Then the administration promotes these regulations, 
which any fairminded person would believe are skewed to the 
disadvantage and unfairness to employees--particularly to nurses, 
particularly to firefighters, particularly to police, who are the 
front-line defense in homeland security.
  I am wondering how the Senator from Nevada views this proposal by the 
administration, in terms of fairness to workers in his own State.
  Mr. REID. With the Senator from Massachusetts on the floor, I will 
respond this way. The Senator from Massachusetts has led the fight for 
decades on raising the minimum wage. I say to my friend, it seems so 
unusual, so absurd to me that this administration on the one hand will 
not let us even have a vote on raising the minimum wage, yet at the 
same time they are trying to cut overtime from people.
  I received a call from a 58-year-old man in Las Vegas, my friend, 
Sunday night. He said, You know, my diabetes is getting worse. I think 
I am going to have to go on injections. I have been taking a pill, but 
I am 58 years old and it is getting worse. He said, The reason I am 
concerned is I have no health insurance. My wife has health insurance 
but I have no health insurance.
  This man works 60, 70 hours a week. He has two jobs. But both jobs 
are such that he doesn't qualify for the fringe benefits. The fringe 
benefits, among other things, are health insurance. So he works two 
jobs, hard work, he is 58 years old, and he has no health insurance.
  I say to my friend, I cannot imagine the mental gyrations this 
administration has to go through to, on the one hand, prevent people 
from getting a basic fair minimum wage and, on the other hand, wanting 
people to work more than 40 hours a week, reversing what has been in 
effect since the mid-1930s.
  I repeat, on the one hand, no raising of the minimum wage, and on the 
other hand let's have you work longer hours.
  I ask my friend from Massachusetts, Can you in any way correlate in 
your mind how an administration could go forward on this plan? I guess 
it is a plan.
  Mr. KENNEDY. We have been joined by the Senator from Iowa, who has 
been a leader in the Senate on this issue. Let me just mention one 
other item in response to the question of the Senator. Not only is it 
the opposition of the administration to the increase of the minimum 
wage, which now at the end of this year will have lost all of the gains 
since the last increase--so the administration is against that--the 
administration is against the long-term unemployment compensation. 
These are workers who have been trying to gain work. They have been out 
looking for jobs. Historically, as we have reviewed this issue with the 
Senator from Iowa and the Senator from Nevada, when we get the 
unemployment compensation, we have been responsive to this, for years, 
in a bipartisan way--except for this administration.
  So we are shortchanging the minimum wage worker. We are shortchanging 
the unemployed. And now the administration comes on top of that, at a 
time when we have a disastrous economic policy, we have lost more than 
3 million jobs, and it says we are going to take it out on the overtime 
workers, which in this instance affects the front-line workers, the 
home guard, so to speak, the ones we are relying on to defend this 
country--the nurses, the firefighters, and the police.
  What in the world is it about hard-working Americans who are working 
hard to provide for their families that this administration just can't 
stand?
  I see our friend and leader here from Iowa, who has been so involved 
in this issue. I know he has some important observations as well.
  Mr. REID. I yield the floor.
  Mr. HARKIN. Will the Senator yield?
  Mr. KENNEDY. I am glad to yield the floor.
  Mr. HARKIN. I thank the Senator from Massachusetts and our assistant 
minority leader, the Senator from Nevada, Senator Reid, for bringing up 
this issue today.

  Again, more disturbing news has come out this week, I say to the 
Senator from Massachusetts. He has covered the increase in poverty in 
this country. More and more people are being left behind and 
unemployment continues to go up. At that very time, this administration 
wants to pull the rug out from underneath people who work hard, to take 
away their overtime protection. That is coming to a head this week, I 
say to the Senator from Massachusetts, because the House of 
Representatives, the other body, is going to be appointing conferees to 
go to conference with us. I understand the motion will be made to 
instruct the conferees to yield to the Senate position which, as you 
know, is to deny the administration the funds necessary to carry out 
these proposed changes in overtime. So I am hopeful the House will 
again vote right on this and make sure we keep the Senate provisions 
and deny the administration the ability to go ahead and just yank away 
the overtime protections for millions of Americans.
  Again, I ask the Senator from Massachusetts why is it--I don't know 
if there is any real answer. Why is it this administration is so intent 
on keeping the minimum wage as low as it is? Why are they so intent on 
that? What do they gain by doing that, by denying hard-working 
Americans an increase in the minimum wage? What does the administration 
gain for themselves or for this country by taking away the overtime 
protections for our workers which have been there since 1938? Why would 
the administration be doing this if we are facing at this time higher 
rates of unemployment, poverty going up?
  I don't know what the Senator's response to that will be, but in my 
view, this is so ideologically driven. This administration, I think, if 
it had its way, would take away all overtime protections, take away the 
minimum wage. They don't even believe in a minimum wage. They wouldn't 
even have a minimum wage. They would have our

[[Page S12215]]

workers compete at the lowest possible level with workers from the 
Third World countries. It is not enough they are shipping our 
manufacturing jobs out of this country, they are now shipping into this 
country labor standards from Third World countries.
  Again, I don't know. I thank the Senator from Massachusetts for 
pointing this out this morning. I think we need to discuss this more.
  We are going to be discussing a supplemental appropriations bill on 
the floor today and for the next few days of $87 billion. That is for 
rebuilding Iraq. Some of that is for the military, but with $21 billion 
we are going to build sewer and water systems, we are going to build 
new schools, we are going to rebuild some swampland--there is 
everything in there to rebuild the economy of Iraq. At the same time 
this administration wants to keep minimum wages low. They will not help 
us get the minimum wage up. And they want to take away overtime 
protection. What kind of fairness is there in that?
  Mr. KENNEDY. The Senator has answered his own question. I think it is 
a pretty clear indication that the administration listens to K Street, 
which is another way of saying the principal powerful special 
interests, rather than Main Street, Main Street, where it is 
happening--whether it is in the rural or urban areas of Iowa, or my own 
State of Massachusetts.
  These are hard-working people at the minimum wage. This issue, the 
minimum wage, is a women's issue because the majority of people who 
receive the minimum wage are women. It is a children's issue because 
more than one-third of the women who receive the minimum wage have 
children, so it is a family issue. It is a civil rights issue because 
so many of these men and women are men and women of color. And it is a 
fairness issue. America and Americans understand fairness. If you work 
40 hours a week you should not have to live in poverty. Yet this 
administration is strongly opposed to this and is using every different 
parliamentary trick to deny us a vote.
  The majority Members of this body favor an increase in the minimum 
wage, but the administration is strongly against it and we are 
basically unable to get it. I think the majority favors also extending 
a hand to those millions of Americans who are unemployed, who have 
worked hard all their lives and, because of the economic policies, have 
been put into the lists of the unemployed. They have been out there 
looking. Increasing numbers of those have been leaving the job market.
  We have historically recognized that we would offer a helping hand to 
those who want to work, who can work and who will work to provide for 
their families during the slump in the economy, and the administration 
says no. Beyond all of that, it says we are going to exclude 8 million 
hard working Americans from possible coverage for overtime.
  I speak for all of our people in Massachusettes when I thank the 
Senator from Iowa for his leadership in the Senate and for the strong 
vote we got in the Senate. We had a bipartisan vote on that. It is 
enormously instructive and important for the administration to hear.
  I certainly know the administration is working very hard against the 
position of the Senator from Iowa and in the House of Representatives. 
But I hope the kind of expression we saw here in the Senate will be 
followed by the House.
  I thank the Senator for all of his good work.
  Mr. HARKIN. Mr. President, I thank the Senator from Massachusetts for 
his kind remarks, but he has been the leader in terms of workers' 
rights for all of his time in the Senate. I am honored to be able to 
work with him to make sure we continue to support our working families.
  I say to my friend from Massachusetts that the Secretary of Labor 
just wrote a recent editorial which ran in the Omaha World Herald, 
which is across the river from Iowa. It is interesting that she wrote 
my amendment ``if enacted, would be a huge setback for U.S. workers 
from getting overtime pay for the first time.''
  What she is talking about there is part of this proposal would 
increase the threshold for guaranteed overtime pay from $8,060 a year 
to $22,100 a year. My amendment does not affect that. What we passed 
here in the Senate protecting overtime pay does not even remotely 
affect it. If the Secretary of Labor wants to increase the threshold 
from $8,060 a year to $22,100 a year, what is she waiting for? She can 
do that tomorrow. She could have done that this spring in the rules and 
regulations. It is because certain friends of this administration and 
industries say they wouldn't support it unless we made other changes to 
take away overtime protection from other workers.
  It is true the proposed regulation does increase the threshold. That 
is fine. Our amendment doesn't touch that. With the other hand they 
take away overtime pay protection for over 8 million Americans. Then 
they say they want to simplify the rules. The proposal is far from 
simple. It is as complex as ever.
  The Society for Human Resource Management was quoted in the Chicago 
Tribune:

       It looks like they're just moving from one ambiguity to the 
     next.

  These rules and regulations can be simplified and updated without 
taking away workers' overtime pay protection. Again, don't take my word 
for it. Here is what industry says from a May 2003 analysis by Hewitt 
Associates, a global human resources outsourcing and consulting firm, 
to its clients on their Web site.
  They said:

       These proposed changes--

by the Secretary of Labor--

     --likely will open the door for employers to reclassify a 
     large number of previously nonexempt employees as exempt.

  Exempt from overtime pay protection.

       The resulting effect on compensation and morale could be 
     detrimental, as employees previously accustomed to earning, 
     in some cases, significant amounts of overtime would suddenly 
     lose that opportunity.

  That is not me saying that. That is a May 2003 analysis by Hewitt 
Associates, a global human resources outsourcing and consulting firm, 
to their clients which include more than half of the Fortune 500 
companies.
  There you have it. This is industry driven to take away the overtime 
pay protection so they can work people longer and not pay them any 
more.
  As I pointed out on the floor previously, and as the Senator from 
Massachusetts did, this is antiworker and it is antifamily. Many of 
these people are women. They are already paying for child care. Now 
they are going to have to work longer and pay more for child care, and 
they don't get a nickel more for overtime. It is not fair. It is not 
right.
  I hope the House of Representatives will vote strongly to instruct 
their conferees to adopt the Senate provision. Let us have the 
administration go back and let us have a fair and reasonable updating 
of overtime regulations.
  Yesterday, on Tuesday, September 30, there was a lead editorial in 
the Washington Post entitled ``Fighting Over Overtime.''
  It said:

       Despite a veto threat from President Bush, the House should 
     vote to block the rules. While the overtime regulations need 
     updating--

  We all agree with that.

     --the administration proposal tilts too far in the direction 
     of employers. It ought to be redrawn in a more balanced way.

  I ask unanimous consent that the article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Sept. 30, 2003]

                         Fighting Over Overtime

       For 65 years employees have been entitled to an hour-and-a-
     half's pay for every extra hour they have worked beyond the 
     standard 40-hour work week. But those protections don't 
     extent to certain white-collar workers--people in executive, 
     administrative and professional positions--and figuring out 
     which employees are covered has become a particularly 
     byzantine area of labor law. The Bush administration has 
     proposed a sweeping rewrite that it says will better protect 
     the most vulnerable workers while giving employers clearer 
     guidance. Labor groups argue that the improved coverage is so 
     limited, and the exceptions so broadly written, that millions 
     of workers would be deprived of eligibility for overtime. The 
     Senate voted this month to prevent the new rules from taking 
     effect, and while the House voted narrowly the other way, it 
     is set for another vote this week. Despite a veto threat from 
     President Bush, the House should vote to block the rules. 
     While the overtime regulations need updating, the 
     administration proposal tilts too far in the direction of 
     employers. It ought to be redrawn in a more balanced way.

[[Page S12216]]

       Employees who earn less than $8,060 per year are 
     automatically entitled to overtime. The Department of Labor 
     wants to raise that floor to $22,100. The increase would 
     provide automatic coverage to 1.3 million workers, the 
     administration says, while labor groups say the number is 
     much smaller. An increase in the minimum level is overdue (it 
     was last raised in 1975), but the amount proposed by Labor--
     $5,000 less than would result simply from adjusting for 
     inflation--is too low. The proposed rules would also make it 
     more difficult for employees who earn more than $65,000 to 
     qualify for overtime pay.
       The biggest problem with the changes would be in the middle 
     range of workers who earn between $22,100 and $65,000. In 
     this area, the new rules would give employers far more 
     freedom to disqualify employees. For example, employees would 
     be considered exempt ``executives'' if they managed a 
     department, directed the work of two or more other employees 
     and had their recommendations about hiring, firing or 
     promotion ``given particular weight.'' Thus, a $23,000-a-year 
     supermarket produce manager could be refused overtime pay. 
     The Labor Department says the changes are merely intended to 
     make the rules easier to apply, not to deprive anyone of 
     overtime. Yet it's hard to see how some of its gauzy new 
     tests are going to promote any less misunderstanding. 
     Administrative workers, for example, are defined as those who 
     hold ``a position of responsibility'' with the employer, 
     something that is in turn defined as doing ``work of 
     substantial importance'' or ``requiring a high level of skill 
     or training.''
       Labor Secretary Elaine L. Chao, dismissing the arguments of 
     those who ``think employers are out to exploit workers,'' 
     says that businesses are lobbying for the changes ``not 
     because they're getting any particular benefit but because 
     they just want clarity.'' But employers and their advisers 
     see it differently. Hewitt Associates, a leading human 
     resources consultant, noted that ``employees previously 
     accustomed to earning, in some cases, significant amounts of 
     overtime pay would suddenly lose that opportunity.'' 
     Assessing the rules in a memo to clients, Proskauer Rose, a 
     law firm that represents employers, noted, ``Thankfully, 
     virtually all of these changes should ultimately be 
     beneficial to employers.'' Workers who earn overtime derive a 
     quarter of their income, on average, from overtime pay. They 
     might not be quite so thankful.

  Mr. HARKIN. Mr. President, I ask to be recognized on my own time.
  The PRESIDING OFFICER (Mr. Talent). Under the previous order, there 
are 9 minutes 40 seconds left on the Democratic side.
  Mr. HARKIN. I appreciate that. I will not take that much time.

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