Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2004 - Amendment No. 1580

DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2004

AMENDMENT NO. 1580

Mr. REED. Mr. President, I rise in support of the amendment of Senator Harkin to preclude and prevent the Bush administration from eliminating overtime pay for millions of hard-working Americans.

We just celebrated Labor Day. As is the custom, the President was out addressing labor in Ohio, talking to working men and women. The reality is that many of those families depend on overtime pay to make ends meet. He did not announce to them that buried in the bowels of the Federal Register is a provision that would severely restrict access to overtime pay for millions of American workers.

He talked about creating a position of economic czar to spur manufacturing, but, frankly, I think if that audience understood that as he spoke he was also proposing and working to deny many of them access to overtime pay, they would have been shocked and amazed—as I am shocked and amazed.

At a time when our economy is searching for ways to rebound from the longest recession we have experienced in many years and from the most severe loss of employment of any administration since Herbert Hoover, the idea that we should prevent people from getting overtime pay seems ludicrous, but that is precisely what the administration is proposing.

Indeed, if the administration were serious about ways in which we could stimulate the economy, one way is to reward the effort of working Americans when they work beyond 40 hours, give them access to traditional overtime pay, and let them go ahead and use those resources for the family, for investment in America.

Frankly, it is a shock to me that the President is conducting this campaign to surreptitiously and quietly remove overtime protection that has been the law for the country since 1938 which every American takes for granted. In the 1930s, there was a great debate about labor laws, and a compromise was struck. Some industrial nations absolutely have a prohibition on working beyond so many hours a week, and I think rightfully so, but that is too inflexible—but certainly at some level, and the level decided on was 40 hours. After that, it would be appropriate—in fact required—that a worker would be compensated for at least time and half for his wages.

We are here today because Senator Harkin, I think quite rightly, has proposed that we step to the plate publicly—not surreptitiously—and vote on this measure, vote whether we are going to deny overtime pay to millions of Americans or continue a practice, a tradition, and a law that has served this Nation well for almost 70 years.

About 79 percent of today's workers qualify for overtime pay. It accounts for about 25 percent of their income. Just think, if working Americans—79 percent of them—lost 25 percent of their income or, even a fraction of that, 10 percent of their income. They would be in desperate straits with their mortgage responsibilities, their tuition responsibilities, and their health care responsibilities.

All of us know because we spent the last month back in our home States visiting with families who are working hard. Both spouses are working hard just to make ends meet—not saving up for a fancy vacation or for a fancy anything but just to make sure the bills are paid. As I said, in 1938 we struck a balance. We set a clear line. We said essentially that if you work beyond 40 hours a week, then you get time and a half. It gives families an option. In fact, we all know some families look forward to the opportunity for overtime work because that is what gives them the margin to get by in a very competitive environment, and a very expensive one.

In 1938, the Fair Labor Standards Act recognized that there has to be some flexibility in legislation. It says there are certain white-collar workers who are professionals—highly paid executives, highly compensated workers who do not need the protection because of the nature of the marketplace and who could be exempt from the requirement to pay overtime. They established several salary tests—a "salary-level" test, a "salary-basis" test, and the "duties test." But essentially, as I view it, it was a narrow exemption. The rule was that if you worked more than 40 hours, you would qualify for overtime pay.
But there is a narrow exemption for white-collar duties. Again, because of the nature of the marketplace, these individuals, because of their skills and because of their abilities, are quite capable of negotiating their own arrangements and their own terms. That was, a reasoned and principled balance. Today, that balance is being upset by the proposal by the Bush administration.

First, let's briefly discuss what the rules are today. If you earn less than $8,840 per year, you cannot be exempt from the requirement to pay overtime. That is sensible. Of course, $8,840 a year is trivial in some respects in terms of buying for a family in the United States in the year 2003. The administration recognizes that the proposal is artificially low. They proposed to raise the figure to the total of $22,100. But they are not going to index this figure. So this figure could be locked in concrete for years. More importantly, even this figure of $22,100 is basically the poverty level for a family of five. In fact, the Department of Labor's own lower living standard income level—when they do predictions—suggests that a family of four requires about $31,750 to avoid poverty. Yet we are saying there is a range of people earning $22,000 and beyond who could lose their overtime pay even though they are desperately close to poverty. It doesn't make any sense to me. I think we should raise the level. We should raise it to a level that is consistent with keeping a family out of poverty before we take away their automatic rights for overtime beyond 40 hours a week.

But the biggest change the administration is proposing is to basically broaden the category dramatically for who is white-collar or executive. What it means is that before we considered a professional—according to the definition, it is someone who has had a prolonged course of intellectual studies: lawyers, doctors, obviously academics, civil engineers with qualifications and certificates. But now the administration wants to go ahead and say, no, this is really just someone who, through experience, has gained the title of "professional."

This means we are opening up this possibility of losing overtime pay for draftsmen, engineering technicians, paralegals, emergency medical technicians, licensed practical nurses. And I can tell you that licensed practical nurses in a hospital are professionals but they are certainly not paid like a doctor is paid. This rule would put them on that level. She is a professional. I don't think that makes any sense. Lab technicians, dental hygienists, physical therapists, respiratory therapists, lab technicians, and some registered nurses will be denied overtime pay because they are now "professionals."

There is a broadening of the definition of "executives." When this legislation was passed almost 60 years ago, those executives had a narrowly construed exemption. They were someone who exercised significant authority over a significant number of people. Now they are talking about someone in a minimal supervisory responsibility who could be classified as an executive. Some restaurant workers who happen to be the head of a shift of other waiters are now suddenly executives.
That is news to a lot of the people I know who work in the hospitality industry. Certainly, they would be executives in terms of base pay. But in terms of overtime pay, they are not.

Again, to me, that is something that strikes against the whole spirit of people working beyond 40 hours a week. They should qualify for overtime with these narrow exemptions. Exceptions now are being broadened beyond that definition. I think this rule, as a result, is very questionable.

The effect may be that families will lose out. The average American working puts in more hours than in any other country in the world—almost 1,900 hours a year. That is how long the average American worker works.

As I said, more and more families rely on not just the income of a primary breadwinner but both spouses are working. We are the hardest working nation in the world. We pat ourselves on the back for our industry, for our dedication, and for our determination. And here the administration is not rewarding that effort but effectively punishing people, saying: Well, you might be compelled to work overtime but you won't be paid for that. That doesn't make any sense.

This has a particular impact on health care workers, I suggest, because it is so easy in that context to talk about supervisory responsibilities and professional qualifications. There is just enough pay so they will go over the threshold. My home State of Rhode Island has 68,000 health care workers. Thousands of them count on overtime pay to just make it through the month. If they lose that pay, they are going to be in a serious predicament, along with their families and our whole economy.

The Department of Labor estimates that the proposal will only affect about 644,000 Americans. Frankly, that is a gross underestimate. Probably millions will be affected by it because of the ambiguity of these new classifications because the incentives, if you will, are for employers to find ways to deny individual workers the right to overtime compensation.

In fact, the Economic Policy Institute studied just 78 of the 257 proposed "white-collar" occupations and estimated that 2.5 million salaried employees would lose their right to overtime if these proposals were adopted. I don't believe we should weaken the exception in this economy.

We have just today seen another report of unemployment. Unemployment is hovering at 6.1 percent at recessionary levels.

In fact, we saw a dramatic fall in payrolls, the number of people actually in nonfarm occupations working. We have seen productivity increases which are good, but they have not been balanced by gains in employment.

Fewer people are working. Since the administration took office, 9 million people have lost their job. Today, in addition to that, we are telling the people who are still hanging on to employment: "Don't count on overtime"? That is not fair and it is not good for our economy.

I would hope we could vote on this amendment and that we could send a very strong message that what has worked for 60 years, what most people believe is deeply ingrained in the fabric of the American market and workplace—the simple notion that if you work more than 40 hours a week you qualify for overtime—can be maintained as it has been. I hope we can do that.

Mr. President, I yield the floor and suggest the absence of a quorum.