Clueless On Impact Of New OT Rules

Aug 23, 2004
George Anderson

By George Anderson

Okay. The new federally mandated regulations regarding overtime go into effect
today and, in the tradition of all things coming out of the nation’s capital,
here is what we think we know.

  1. The new rules mean U.S. employers may pay out an additional $1 billion in
    overtime this year. On the other hand, some might wind up paying less than
    they are now.

  2. Anywhere from 107,000 to 6 million workers previously eligible for overtime
    pay may no longer be getting it.

  3. Up to 1.3 million workers who previously weren’t being paid overtime may
    now be getting time and a half for all those extra hours being put in. But,
    as the Lansing State Journal points out, it could also be that very
    few (number not specified) are added to the OT eligible ranks.

How the new OT rules will affect retailers remains to be seen. The industry
has seen more than its share of lawsuits by employees seeking recompenses.

Retail workers have filed suits against employers in the past claiming they
have been coerced into working off the clock. Store managers have also filed
suits claiming they have put in extra hours, without additional compensation,
doing work not included in their duties.

The new rules, proponents claim, address some of the ambiguities contained
in the previous law. For example, the so-called “duties test” has been updated
and expanded to include professional, executive, administrative and outside
sales jobs. People working in these capacities will no longer be eligible for
overtime unless it was previously negotiated in an employment agreement.

Organized labor is hopeful that the new regulations will help spur its membership
drives. The thinking is that unions have been successful in getting their members
better deals than what is guaranteed by federal regulation and will use this
as a recruiting tool.

Store employees at Meijer are represented by the United Food and Commercial
Workers Union (UFCW). Workers at Meijer get overtime pay whenever they exceed
eight hours worked in a day.

Matt Stratton, a grocery order writer at Meijer, told the Lansing State
, “People who work at other retail jobs are surprised when they learn

Patrick Barrett, executive team leader at a Target, said employees in the store
he works do not have to worry about overtime pay since they almost never work
any. “If it happens more than once every six months, that’s a lot,” he said.

Unions also see an opportunity to recruit based on those being phased-out of
overtime eligibility by the new laws. Robert Potter, president of United Food
and Commercial Workers Local 951, said, “We expect there will be more interest
in organizing among professionals. It’s one more weapon given to organizers.”

Moderator’s Comment: What has been the record of the
retail industry in terms of demanding and paying for overtime worked? How will
the new overtime regulations impact the retail business?

Bill Schurgin, a labor lawyer in the Chicago office of
Seyfarth Shaw said, “This has become a very big area of plaintiffs’ employment
law, and it is not simply going to go away because of these new regulations.”

George Anderson – Moderator

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