New overtime workers feel demoted

MU employees say they earned salaried status

The complaints began even before University of Missouri administrators e-mailed more than 400 employees to confirm what might seem a harmless change — soon, the memo said, they’d be eligible for overtime pay.

It was not what Mary Porter wanted to hear. It had taken Porter 35 years to climb the university’s ladder, from the copy machine operator’s job she started just out of high school, to a position with the salary, benefits and responsibility certifying her as a professional. Now the grandmother of three saw the university, armed with new government rules on overtime pay, pulling the ladder’s top rungs out from under her.

“It just feels like, in a sense, I’ve had something taken away from me,” said Porter, an administrative associate who half-jokes that she’s “trained” the last four chairmen of the university’s anthropology department. “I had that (salaried) status because I worked my way up. … It made me feel personally like I had accomplished something.”

The Bush administration’s new rules on overtime pay have been at the center of a furious, and still unresolved, debate over charges they will cost millions of workers the right to overtime pay. But some employers are catching flak of a variety few expected — not from workers angry about losing overtime pay, but from some irritated about a change that gives them the right to receive it.

Overtime pay is the quintessential pocketbook issue, but the workers’ objections are largely rooted in the immeasurable. For many, the change amounts to a difficult-to-define feeling that their work and status is cheapened.

“Not every company saw this coming, and I certainly don’t think the regulators had a sense that this was going to happen,” said Jonathan Sulds, an attorney with corporate law firm Akin Gump Strauss Hauer & Feld LLP in New York.

Employers, anxious to turn the tide on a swelling wave of expensive lawsuits by workers claiming they’ve been unfairly denied overtime pay, largely favored the administration’s overhaul of wage laws. The changes, which took effect Aug. 23 despite vehement criticism by labor unions, are focused mainly on skilled and white-collar jobs, exempting many such positions from eligibility for overtime pay.

Some of the changes are straightforward. Workers earning less than $23,660 a year must be paid for overtime under the new rules, almost triple the old salary requirement. Workers earning more than $100,000 and whose jobs regularly include at least one administrative or professional responsibility will be excluded from overtime eligibility.

Complex laws

But the new rules, part of the federal Fair Labor Standards Act, are complex and leave much to interpretation. Nobody really knows how many workers will be affected, or how they will be impacted.

Administrative associate Mary Porter sorts mail in her office on the University of Missouri campus in Columbia, Mo. Porter, pictured Wednesday, is upset that the new overtime rules have moved her from a salaried position to hourly status which she considers a demotion.

The debate has included estimates that anywhere from 107,000 to as many as 6 million workers will lose overtime eligibility. Estimates of how many will gain eligibility vary from almost none to 1.3 million. It could be some time before the reality becomes clear.

Employers, though, say strong reactions from some workers whose jobs have been reclassified from salaried to hourly — giving them access to overtime pay — has already created awkward situations.

At Missouri, administrators are shifting between 400 and 500 salaried workers to hourly status, eligible for overtime pay. Not one of the school’s 19,000 employees is losing the right to overtime, said Ken Hutchinson, vice president of human resources.

The change has generated complaints from many of the affected employees, including administrative associates, executive assistants, and computer workers. A series of meetings in recent months on the Columbia, Mo., campus drew up to 100 workers and professors who back them, criticizing the administration’s plans.

“Many have come up through the ranks and finally reached a point where they were considered to be an executive, administrative or professional employee,” Hutchinson said. “So changing that has been difficult and some feel like it’s a demotion. It’s not the case at all.”

Administrators responded to some criticism by grandfathering the affected workers, so they will not lose the extra vacation time to which salaried workers are entitled. But many of the employees have been at the university so long that the vacation reduction would not have impacted them, and the change has done little to salve hurt feelings.

Shifting duties

Consulting firm Hewitt Associates, which has surveyed employers on the topic, found many companies were running behind in figuring out the new rules. But as they do, most firms are likely to add more workers to the rolls of overtime eligibility than vice-versa, said Tom Farmer, a senior consultant at Hewitt.

“As a practical matter, most employees are going to welcome overtime eligibility,” he said. But “some of them will probably be kicking and screaming all the way to the time clock.”

Sulds said that rather than reclassify such workers as hourly, some companies have beefed up their job duties so their positions more clearly meet the rules’ tests for exemption from overtime.

Such expanded responsibilities are not necessarily accompanied by an increase in pay, he said.