Much Ado About Nothing? Just Look at Your Next Paycheck

Regular readers of this blog are well aware of the ongoing battle to prevent new overtime regulations from going into effect. You may have noticed, however, that Workplace Fairness, as well as other groups working in opposition to the new regulations, have not been focusing so much on this issue lately. Now we are hearing the latest spin from those on the defense side, which is that the whole battle was “much ado about nothing”– one that was engaged in for political rather than substantive reasons. Once the white flag has essentially been waved, one might expect a little more graciousness (and intellectual honesty) from the victors. Or maybe not.

The battle was furious, if not often fast: not in several decades had the Fair Labor Standards Act (FLSA) been amended to take away rights from workers. Yet this was precisely the end result of regulations first proposed by the Department of Labor (DOL) in March 2003. “The law hadn’t been touched in years, and needed to be updated and modernized,” we were told. There are few that wouldn’t admit the truth of that statement, but the agreement doesn’t extend much further than that. Much of the modernizing did not go nearly far enough: for example, the outdated salary test (which makes many of the most low-paying jobs subject to overtime requirements), has been increased. But it still not scaled to inflation, so it will be rendered meaningless in a few years just as its predecessor was, especially if political differences keep new regulations from being enacted for decades like they did before.

After the “Notice of Proposed Rulemaking,” which alerted the public of the Labor Department’s intent to make regulatory changes, was issued in March 2003, groups geared up for battle, once the pro-employer slant of the proposed regulations was revealed. By the comment deadline in June 2003, pro-employee and pro-employer groups submitted long and detailed comments, while a grassroots letter-writing campaign spearheaded by the AFL-CIO netted 75,280 comments–more than the Department of Labor (or perhaps any government agency) had ever received in response to a regulatory proposal.

While everyone who cared about this issue waited with bated breath for months, the DOL worked to incorporate some of the changes and further refine the proposal. It was not until the following April (of 2004), that the final regulations were issued. (See the Preamble for a detailed account of the revisions.) As reported here at that time, the changes were a mixed bag. From the employee perspective, there were some improvements from the first round proposal, while employers were lukewarm to some of the changes. Yet, the final assessment from groups representing workers was that there were certain aspects of the proposal that were still quite objectionable, and still likely to result in workers who earned overtime under the old regulations who would not be eligible for overtime under the new regulations.

The battle played out before Congress in 2004 as well. Once the regulations were issued in April 2004, with an effective date of August 23, 2004, the only way to stop the regulations was for Congress to take action. And take action it did: on six different occasions, either the House or the Senate, through a majority vote in chambers with Republican majorities, voted to oppose the Administration’s overtime proposal, by withholding funds for its implementation. (Some of these votes are listed at the Workplace Fairness Action Center.) However, the leadership of both houses of Congress caved into the demands of the Bush Administration, who vowed to veto (for the first time in President Bush’s first four years) any bill that contained a restriction on implementing the new regulations. Not surprisingly, no version of the restrictions passed by Congress made its way into a bill headed to the President for his signature. This meant the regulations went into effect in August.

There was still hope, however, that the regulations might be revoked if John Kerry won the presidential race, as Kerry during his campaign vowed to do so, just as one of the first acts of the Bush Administration was to revoke the ergonomic regulations, more than a decade in the making, that finally went into effect in the waning days of the Clinton Administration. Well, we all know how that turned out. The President was reelected to the White House, Secretary of Labor Elaine Chao, a strong proponent of the overtime changes, was one of the few members of Bush’s Cabinet to stay on for a second term, and the overtime regulations were here to stay. There were a few efforts to keep the battle going, but the momentum had clearly shifted.

So as the battle-scarred opponents lick their wounds and assess what comes next for workers and overtime pay, here comes the defense spin. Business and Labor Reports (BLR), a legal publisher whose publications are oriented toward employers, recently issued a press release with the following provocative title: New Overtime Regulations Brouhaha – What Was the Fuss All About? The release’s header says “During the election there was enormous controversy over these changes, with some parties claiming that overtime was being destroyed. Now, it seems the controversy was overblown,” while BLR’s commentator, Susan Prince, says “it seems like the overtime changes are a nonevent.”

Their basis for this conclusion? BLR ran a Google search on the words “controversial overtime regulations,” and nothing came up after the election date. (Not to question their methodology, but perhaps omitting the word “controversial” would net more results. I’m sure I’m not the only one that continued to hear about this issue after the presidential election, from the AFL-CIO and other groups maintaining the fight.)

Fellow blogger Michael Fox, who represents the defense perspective in his blog “Jottings of an Employer’s Lawyer,” jumps on the bandwagon by calling “the fuss over the new white collar regulations…really much ado about nothing. ” At least Fox acknowledges that the initial onslaught of protests by employee advocates led to significant changes. (Of course he considers those changes to have spawned a “milquetoast” version of what the regulations could have been.)

The faulty leap in logic that both authors make is the following: the extent to which the forces opposing the changes have quieted, post-election, indicates that the battle was largely political, rather than substantive, to begin with. Let’s put this logic to another test: when employers, upon the advice of their attorneys, decide to concede defeat and either settle cases on less-than-favorable terms, or pay the judgments against them, does this mean that their opposition was frivolous and never should have been mounted in the first place? I suspect that would be a very rare concession indeed, yet that’s essentially the conclusion they draw when the shoe is on the other foot.

These commentators just don’t get it: It’s over. Their guy won. The new regulations aren’t going anywhere for a while. And if commanding a majority in the House of Representatives, considered to be the more conservative of the two chambers at present, doesn’t mean anything in terms of the outcome, then there’s not much else that can be done at present.

First, before continuing any kind of fight, employee advocates have to assess the impact. While there’s a few in every bunch who just want to “chase the money,” my perception of this battle based upon the attorneys I know is that nothing would make everyone happier than to be proved wrong, and for more workers to benefit from these changes than to be harmed. It’s just too soon to tell whether that’s the case or not. Even employers are still assessing the new regulations, and not necessarily rushing to implement them until they and their lawyers feel 100% comfortable with how they are likely to be interpreted. So until the instances of harmed workers start to surface, opposition in the courts may be premature (and it’s already been proven that opposition in Congress is more or less futile at this point.)

Most importantly, however, it’s important for workers and their advocates to conserve energy for the battles to come. Even though employee advocates were not ultimately successful in preventing the new regulations from going into effect, their opposition did make a significant impact in terms of blunting the worst of some of the proposed changes, and was thus hardly futile. Moreover, it’s important not to keep beating a dead horse or banging one’s head against a brick wall (whichever you prefer) in order to stay refreshed for the battles ahead.

For example, yet another chink in the overtime armor is an effort to substitute compensatory time for overtime. While proponents claim this will be “voluntary,” tell that to an employee dependent on overtime pay, whose wages are inadequate in the first place. It may be said that “time is money,” but that’s just not true in this situation. A comp time proposal was introduced in the last session of Congress, but didn’t move forward. With an Adminsitration emboldened by the overtime victory, this may very well be the next level of “overtime reform” to which we have to look forward–and fight.

We hope that workers will join us in the battles ahead to erode their interests, because there will certainly be some in the next four years. We promise that when we ask you to do something–to write Congress or otherwise take action–that it won’t be “much ado about nothing,” but because we need every last person who will fight the very real threats to workers.

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Madeline Messa

Madeline Messa is a 3L at Syracuse University College of Law. She graduated from Penn State with a degree in journalism. With her legal research and writing for Workplace Fairness, she strives to equip people with the information they need to be their own best advocate.