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Fair Pay Law Effective Monday
08/22/04
By: Bonne Eksten, Wilmington Star News
When the Department of Labor began looking at who got overtime and who didn't and how that might change when the regulations were rewritten, first responders – police officers, firefighters and emergency medical technicians – wanted to be heard. The old regulations did not explicitly address the status of these employees.
The new regulations do.
The Fraternal Order of Police calls it an "unprecedented victory" for first responders, protecting and expanding their ability to earn overtime.
Wilmington firefighters currently get overtime pay – but now their ability to earn overtime has been protected.
"Overtime's hard to get," Wilmington Firefighter Scott Kaczynski said.
Overtime can be a popular option for many firefighters, especially since the department is currently down 18 firefighters. "When a pager goes off, it (overtime) goes quick."
Another firefighter, Dennis Griffin, takes as much overtime as possible. He has a son, and a baby daughter was born last week.
"The extra cash helps out a lot," Mr. Griffin said.
Firefighters often work overtime with different squads or during different shifts. Mr. Griffin said, "I do take overtime when it's available for the experience and to meet different people."
In the past several weeks, the city of Wilmington has done a general review of all of its employee classifications to ensure those who qualify received overtime, Human Resources Director Al McKenzie said.
Under the new regulations, Mr. McKenzie said there would most likely be some city employees who were exempt from overtime, who would now qualify.
"We want to make sure we are compliant," he said. "We want to pay them promptly and accurately compensate them for the work they perform."
Overtime – who is eligible and who is not -- will be more explicitly defined on Aug. 23 when the Fair Labor Standards Act goes into effect..
The new law isn't so much a new law, but it is a codification of existing law – case law developed in lawsuits over the years.
The Department of Labor has not updated many overtime pay regulations for many white-collar employees since the act was passed in 1938. Current regulations include job titles like key punch operators, legmen, straw bosses and gang leaders.
The labor department updated minimum salaries in 1975 when Pres. Carter was in the White House. Under current regulations, employees earning $8,060 per year may be classified as an executive and be denied overtime pay.
When the new law goes into effect the labor department has raised that to $23,660.
Marketplace still sets the pace.
Gabby Pike is a registered nurse at New Hanover Regional Medical Center. At this time last year she was an hourly worker and would make good use of overtime pay, especially around the holidays.
This year Ms. Pike is a manager, overseeing a staff of 120. She no longer qualifies for overtime pay.
Does it make a difference that she may have to work longer hours and not get overtime?
"I don't do this for the money," she said.
Many workers rely on overtime as part of their budgeting. For others, it may be an imposition.
Registered nurses, even though they are classified as professionals, are paid hourly. While the government says they are exempt from overtime, they receive it – unless they move into management positions.
Why?
Troy Bond, vice president of human resources at the hospital said free enterprise is not always pretty, but it is always effective. If the medical center wants to attract nurses, its pay has to be competitive, he said.
The FLSA, referred to as Fair Pay, exempts from overtime executives, administrative and professional employees and those who work in outside sales.
But some people find the changes confusing.
For instance, the AFL-CIO claims registered nurses will lose overtime pay. The DOL disagrees, claiming RNs have been viewed as learned professional employees exempt from overtime since 1971.
Licensed practical nurses, on the other hand, are non-exempt, and will continue to receive overtime – according to the law and not free-market policy.
Mr. Bond, who has worked in human resources for 19 years, believes it is time to clarify and modernize who gets overtime and who does not. As for the medical center, he said the new regulations will affect fewer than 100 of its 4,500 workers and those job descriptions are under review.Of those, none would go from non-exempt to exempt status – in other words, be precluded from getting overtime. Any employees who might have their job classification changed would become eligible for overtime under the new regulations.
Fair Pay, called the "white-collar" law, has caused confusion among many and created an opportunity for the AFL-CIO to flex its muscles.
Blue collar jobs
Jeff Snider is an electrician in Oak Island. He regularly works overtime and counts on that as part of his budgeting for his family.
He said he heard he wasn't going to get overtime with the new law, but couldn't remember who had told him.
"My main concern," he said, "if I make over $455, I'm not entitled to overtime."
Most blue-collar workers – electricians, plumbers, carpenters and other skilled tradesmen, are termed non-exempt and the new regulations do not affect their ability to earn overtime.
Suzanne Ffolkes, a spokeswoman for the national AFL-CIO, said Fair Pay could strip up to 6 million workers of overtime benefits. It is a claim the Department of Labor hotly disputes, calling it a "rehash of misinformation" and a "last-ditch effort to re-start the misinformation campaign."
The DOL claims the rules strengthens protection for 6.7 million workers, and only 107,000 employees who all "earn over $100,000 could (their emphasis) be reclassified as exempt."
It's part of an ongoing war of words between the government agency and the union.
The AFL-CIO, Ms. Ffolkes said, is not opposed to updating and raising the wage threshold – and believes it could be higher – and wants to expand the rule to include more low-income workers.
"Large numbers will lose overtime rights," she said, "like working supervisors, assistant managers and team leaders."
The argument is offered that a low-level clerk who supervises two other clerks will be called a supervisor and stripped of overtime.
The DOL counters the supervisor must pass a duties component, including weighing in on hiring and firing decisions.
Political football
Paul Dorf is the managing director of Compensation Resources, Inc. and a consultant in executive compensation.
"Companies are very confused," he said in a telephone interview from his New Jersey office last week.
One issue, he said, is that Fair Pay is "a political football" in a highly contested election year.
"It's amazing that this was even promulgated," he said, even though he believes the regulations were "long overdue."
While he admits that prior to the latest modifications, the regulations were "hoary and old," the problem is that the government has not acted in a long time to clear up ambiguities.
Previous administrations have been loath to touch the issue, Mr. Dorf said.
In a survey of 157 companies, Mr. Dorf found that more than one-half would see virtually no change in overtime eligibility. While his research shows about one-quarter of the companies he polled have difficulty understanding the new regulations, fewer than 10 percent were unsure how many of their workers would be impacted.
Mr. Dorf said he found the regulations "well thought out and not a knee-jerk reaction.
There is room for confusion, he allowed, in terminology.
"It's difficult to define some of these things," he said. For example, are all sales people treated the same – whether they sell real estate, computer mainframes, expensive automobiles or whether they are sales clerks? The title, he said, is such a conglomeration it becomes meaningless.
"These regulations a long overdue. Some are simplistic, some are not fully explained," Mr. Dorf said.
On the whole, he claims, the regulations have been cleaned up, more ambiguities have been eliminated and everyone knows what the rules of the game are.
Basically, Mr. Dorf said, when it comes to salary issues, "You cannot mess with people's money."
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