[Congressional Record Volume 150, Number 59 (Monday, May 3, 2004)]
[Senate]
[Pages S4732-S4734]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          OVERTIME REGULATIONS

  Mr. KYL. Mr. President, I rise to speak to the legislation we are 
going to be taking up when we go back to S. 1637, called the Jumpstart 
Our Business Strength Act, which will attempt to modify the law 
relative to how we treat manufacturing firms in tax policy to comply 
with rulings of the World Trade Organization and related legislation.
  There is an amendment pending that will be offered by Senator Harkin 
that relates to final regulations issued last week by the Department of 
Labor. I would like to speak to why we should quickly dispense with 
that Harkin amendment to move on with the S. 1637 and not get bogged 
down in the regulations that were issued by the Department of Labor.
  The regulations issued a final rule to update the previous 
regulations that implemented the Fair Labor Standards Act. That act 
implements rules guaranteeing overtime pay for certain nonwhite collar 
workers--in other words, when somebody works longer than the period 
they would ordinarily be required to work, what circumstances the 
employer is required to then pay overtime pay for that additional work. 
The rules the Department of Labor has had in effect have not been 
modified for over a quarter of a century. The salary levels to which 
these regulations apply have not been changed since 1975. The duties 
test has actually not changed since 1949. That is the test that tries 
to define whether a worker is a white collar worker who would be exempt 
from this requirement or a blue collar worker who would be guaranteed 
overtime if they worked longer than they are supposed to. What this has 
done is to leave employers with very obsolete job 
classifications, things such as straw boss and leg man, other titles 
for work that have not been performed for years. That needed to be 
fixed.

  The Department of Labor had been struggling to try to bring it up to 
date and get final rules into place, which now has been done. A lot of 
the concerns expressed by supporters of the Harkin amendment are based 
on interpretations or misreadings of the previously proposed rule. But 
a lot of that has now been cleared up in the final rule made effective 
last week. Much of the criticism should fall by the wayside.
  Let me describe what the final rule does. It would guarantee overtime 
benefits to 1.3 million low-wage workers who before were not entitled 
to overtime pay. Under this rule, 6.7 million new employees must be 
paid overtime regardless of their duties. That is 1.3 million more than 
is currently the case. It would raise the minimum salary level at which 
workers are ensured overtime pay from $155 to $455 a week or $23,660 
annually. That is the largest increase since the law was enacted in 
1938. Under the previous regulations, individuals earning the minimum 
wage, which would be about $10,700 a year, were not guaranteed 
overtime.

[[Page S4733]]

They must be classified by their employers as nonexempt in order to 
receive overtime. The previous regulations guaranteed only employees 
earning less than $8,000 a year a nonexempt status--in other words, 
guaranteed minimum wage. This regulation updates all of that.
  The work the Department of Labor has done is going to help a lot of 
Americans. Over 6.7 million Americans will now be guaranteed this 
overtime pay and a lot more than that will probably get it, depending 
upon exactly what kind of work they perform. Under the new regulations, 
employees who earn more than $100,000 annually would be exempted, but 
here again, even they would only be exempted if they regularly and 
customarily perform executive, administrative, or professional duties. 
Even somebody with earnings over $100,000 a year could get overtime 
pay. The Department of Labor estimates only about 107,000 employees who 
earn $100,000 or more could be reclassified as white collar employees 
and potentially lose their overtime pay. Those who earn between $23,660 
and $100,000 will remain eligible for overtime pay if they meet the so-
called ``short test,'' which determines whether they are exempted white 
collar employees or not.
  Let me respond to some of the misinterpretations. There was a view 
that a lot of folks would not be guaranteed pay. The new rules 
explicitly define certain groups as being guaranteed pay. For example, 
first responders, police officers, firefighters, paramedics, emergency 
medical technicians, and similar public safety officers are entitled 
overtime pay.
  I ask unanimous consent to print in the Record a statement from the 
Fraternal Order of Police relating to these regulations.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 Final DOL Regulations Protect and Expand Overtime for America's First 
                               Responders


   F.O.P. Efforts Crucial to Protection of Overtime for Public Safety

       Today National President Chuck Canterbury hailed the 
     release of the Department of Labor's (DOL) final regulations 
     on the exemptions from overtime under the Fair Labor 
     Standards Act (FLSA) as an ``unprecedented victory'' for 
     America's first responders. The regulations, which were first 
     proposed in March 2003, highlight the F.O.P.'s singular and 
     significant contribution to protecting the future of overtime 
     compensation for State and local police officers, 
     firefighters and EMTs.
       ``The Fraternal Order of Police is extremely grateful for 
     the work of Secretary of Labor Elaine L. Chao and Wage & Hour 
     Administrator Tammy McCutchen to take into consideration and 
     incorporate the views of the F.O.P. in developing their final 
     regulations,'' Canterbury said. ``Since the beginning, the 
     F.O.P. was alone in its confidence in this Administration's 
     commitment to our nation's first responders, and their 
     intention to resolve this issue to the benefit of these vital 
     public servants.''
       On the preamble to the final regulations, the Department of 
     Labor acknowledged that it was responding specifically to the 
     views of the Fraternal Order of Police ``about the impact of 
     the proposed regulations on police officers, firefighters, 
     paramedics, emergency medical technicians (EMTs) and other 
     first responders.'' DOL went on the note that the current 
     regulations do not explicitly address the exempt status of 
     these employees, and ``this silence . . . has resulted in 
     significant federal court litigation to determine whether 
     such employees meet the requirements for exemption.''
       The final Part 541 regulations make several important 
     changes for public safety employees. for the first time ever, 
     the regulations clarify that neither the regulations 
     contained in 29 CFR nor the Section 13(a)(1) exemptions apply 
     to police officers, firefighters, EMTs and other first 
     responders who perform public safety work. The regulations go 
     on to clarify why these employees, regardless of their rank 
     or pay level, cannot be classified as executive, 
     administrative or professional employees, and thus be 
     exempted from receiving overtime pay. In addition, the 
     Department acknowledges that the right to overtime 
     compensation may be extended to some public safety employees 
     who are currently classified as exempt because of changes to 
     the regulations.
       ``Where others were content to ask the Department to say in 
     its final rule only that `no expansion of law enforcement 
     exemptions is included in or intended by the new rules,' the 
     Fraternal Order of Police said `today's public safety work is 
     more unique than ever before, and the final regulations must 
     account for the challenges faced by our nation's first 
     responders in the post-9/11 environment,' '' Canterbury said. 
     ``The final regulations achieve that goal.''
       On 31 March 2003, the Department of Labor published a 
     Notice of Proposed Rulemaking in the Federal Register to 
     revise and update the exemptions from overtime under the FLSA 
     for executive, administrative, and professional employees; 
     also known as the Part 541 or ``white collar'' exemptions. 
     Immediately, the clarion call spread across the nation 
     that the Department was trying to take away the right to 
     overtime pay for hundreds of thousands of police officers, 
     firefighters and EMTs.
        During the public comment period, the F.O.P. worked with 
     the International Association of Firefighters (AFL-CIO) to 
     seek clarification of the Department's intent with respect to 
     the overtime eligibility of public safety employees--an issue 
     which was not explicitly addressed in the proposed rule. In 
     late June, the F.O.P. submitted its formal written comments 
     to the Department. It was the first organization to weigh in 
     on behalf of America's law enforcement community regarding 
     the proposed changes, and advised DOL about the potential 
     impact of the proposal on public safety employees.
        ``We were never concerned that DOL was trying to destroy 
     the ability of police officers and others to earn overtime 
     compensation, despite the rhetoric employed by other groups 
     and some legislators to vilify and demonize Secretary Chao,'' 
     Canterbury said. ``Rather, we believed it was important to 
     point out that the regulations as proposed did not 
     sufficiently recognize the increased workloads and hazards 
     faced by public safety employees since the heinous terrorist 
     attacks of September 11, 2001, and to use that as the basis 
     for our efforts.''
        Canterbury explained that while the F.O.P. faced strident 
     and often vitriolic opposition from other organizations who 
     viewed this as a fight to maintain the status quo, the F.O.P. 
     never considered this to be a viable solution because of the 
     number of public safety officers currently classified as 
     exempt under the existing regulations. Instead, the F.O.P. 
     viewed the proposal as a unique opportunity to correct the 
     application of the overtime provisions of the FLSA to public 
     safety officers.
        ``These final regulations show that this Administration 
     and this Department of Labor are responsive to the concerns 
     of rank and file first responders,'' Canterbury said. ``There 
     has been too much posturing and rumor mongering on this issue 
     by the leadership of other police organizations, who have 
     seemed intent on sacrificing their members' paychecks on the 
     altar of partisan politics. I hope that those who have been 
     so employed over the course of the past year can see the 
     folly of their ways, and that we can all recognize this for 
     what it truly is: an unprecedented victory for police 
     officers and their families.''

  Mr. KYL. The Fraternal Order of Police is one of the groups very 
interested in this issue. It is the largest organization of sworn law 
enforcement officers, and obviously they are in support of the first 
responders being exempt from the nonguarantee--in other words, being 
guaranteed overtime pay.
  Another group is nurses. The licensed practical nurses and other 
similar health care employees will be entitled to overtime pay under 
the new regulations. Originally unions had asserted to the contrary, 
but that is not the case. With respect to registered nurses, they are 
already exempted professionals under current law. The new rule will not 
change that. Explicitly blue collar workers are identified as entitled 
to overtime pay.
  There was a question about cooks. They are entitled to overtime pay. 
The only people in that group that might not be are college degree 
chefs who have degrees in culinary arts, who supervise others in work 
they do. Paralegals will be entitled to overtime pay. Public sector 
inspectors, people such as building inspectors, will be entitled to 
overtime pay. Union courts, collective bargaining agreements in States 
will not be affected by the rule. This is another area that has been 
grossly misrepresented.
  The bottom line is this final rule will bring clarity. It defines 
specific categories of people who will be guaranteed pay and, 
therefore, shuts down a lot of the litigation that has been based on 
the fact that the law has not been explicit or very clear. The 
confusing and outdated current or previous regulation has been a gold 
mine for trial lawyers, and there are a lot of articles that have 
recently been published that point out some of the abuses. The number 
of lawsuits in this area has doubled since the 1990s. Class action 
lawsuits have tripled since 1997. The number of these suits has 
actually surpassed the EEOC class action lawsuits in number.
  While the trial lawyers have made out very well off of the confusion 
of the previous regulations, the plaintiff's benefit is significantly 
smaller. For example, in a recent Oregon lawsuit, which the Presiding 
Officer will be interested in, fast food restaurant workers each 
received $1,300, while the trial lawyers received $1.5 million. In a 
similar California case, workers got $2,800

[[Page S4734]]

while the trial lawyers were awarded almost $4 million.

  Let me conclude by making a point that part of the confusion is due 
to objections by the AFL-CIO. Even before the final rule was made 
public, they were criticizing it, producing TV advertisements, 
misrepresenting the effect of the new rule. This is especially 
distressing given the fact--I know this personally from the Secretary 
of Labor, who had spent untold numbers of hours working on this--it was 
their intention to try to take in all of the criticisms and comments 
and blend them into a rule that made sense for workers. She did this, 
and then to have it attacked before it is finalized, with 
misrepresentations, is very unfair.
  Prior to drafting a rule, the Department of Labor held over 40 
stakeholder meetings with 50 different interested groups, including 16 
different unions, and invited 80 groups to participate in these so-
called stakeholder meetings. It was not as if this were done without 
the input of people clearly interested in it.
  The amendment that is in order when we take up the bill is the Harkin 
amendment. It is unclear precisely what the wording of the amendment 
will be, but obviously the intent is to preclude the regulations from 
fully taking effect.
  I urge my colleagues, after they review that language, to quickly 
dispose of the amendment so we can move on to the important business of 
passing the underlying JOBS bill. As we know, the only group of 
employees that is not going to be guaranteed overtime under the new 
regulations is those making over $100,000 or more. The theory there is 
they are in a position to negotiate their own salary.
  Just to conclude, if this new rule is not allowed to go into effect, 
the biggest winners under the new rule, which are the low-income 
workers, will be the biggest losers. We need to put this into effect, 
clear up the confusion, and create the specific categories that are 
guaranteed overtime pay or these people are going to lose. The police, 
the firefighters, the lower income people, the blue collar workers are 
not going to be assured overtime pay. Remember, it only previously 
would guarantee anybody with $8,000 or less the overtime pay they 
should be entitled to.
  The effect of the Harkin amendment will be to hurt workers, not to 
help them. It is my hope that, again, we can quickly dispense with the 
Harkin amendment, defeat that amendment, support the regulations, the 
new rules that have been adopted by the Department of Labor, let them 
go into effect, and see how they work; in the meantime, move on with S. 
1637, the underlying legislation, the purpose of which is to finally 
get our manufacturing industry back on even par with our competitors, 
particularly in the European market. That is legislation we have to 
pass because of the tariffs that are being imposed each month until we 
comply with the ruling of the WTO.
  The ACTING PRESIDENT pro tempore. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent I be 
allowed to speak for 15 minutes, and I include in that request Senator 
Reid of Nevada who has asked to follow me for an additional 15 minutes.
  Mr. KYL. Mr. President, reserving the right to object, there is a 
division of time between the two sides. Could I suggest that regarding 
the remarks of the Senator from Florida with the Senator from Nevada, 
that they get together and figure out the time to speak if it will not 
be under leader time? Is that acceptable?
  I will object to the request and try to talk to the Senator.
  The ACTING PRESIDENT pro tempore. The objection is heard.
  The Senator from Florida.
  Mr. NELSON of Florida. Is the unanimous consent request that I made 
that I be allowed to speak for 15 minutes, is that acceptable?
  The ACTING PRESIDENT pro tempore. It has been objected to.
  Mr. NELSON of Florida. I ask unanimous consent that I be allowed to 
speak for 15 minutes, and if there is a Member on the other side of the 
aisle who would like to speak for 15 minutes, that they be allowed to 
do so, as well.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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