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How to Cheat Workers 101
With a wink and a nod, the Bush administration claims that 1.3 million low-wage workers will see their paychecks grow just as soon as its revisions to the Fair Labor Standards Act take effect.
It's the administration's nose that's growing: The new rules not only seek to yank overtime pay away from millions of people, they spell out exactly how employers can cheat the few lowest-wage workers who would benefit from the otherwise draconian changes.
"It's akin to the commissioner of the IRS sending a memo to citizens telling them how to cheat on their taxes," CWA attorney Mark Wilson said.
Here's how the game works: Under the new standard, companies will have to pay overtime after 40 hours to any employee making less than $425 a week. Right now, not all low-income workers qualify: For instance, a $350-a-week shift supervisor at a fast-food restaurant can be considered "management" and be exempt from overtime protection.
Soon, though, the labor department says - portraying itself as a big-hearted agency concerned with lifting up poverty-level workers - that fast food company will have to start paying its supervisors overtime, raising their incomes. Really? Look closer. Buried in legal documents the DOL figures regular folks will never bother with, the agency tells employers precisely how to get around the new rules.
By converting the employee's salary to an hourly rate and then dropping it - say from $10 to $8.50 an hour - the company could pay workers overtime as the law requires without spending an extra dime. The DOL regulations even do the math for companies, illustrating exactly how to cheat. Doing so, "results in virtually no (or only minimal) changes to the total compensation paid to those workers," the regulations state.
Yet here's what Labor Secretary Elaine Chao said in a news release announcing the pending changes: "Our proposal will strengthen overtime for the most vulnerable low-wage workers and allow for stronger Department of Labor enforcement of this important worker protection."
In fact, Wilson said, if workers see their hourly wages fall to compensate for overtime pay, they will take home even less money during weeks when they work a flat 40 hours. Companies could pocket the rest and still comply with the law, he said.
It's the administration's nose that's growing: The new rules not only seek to yank overtime pay away from millions of people, they spell out exactly how employers can cheat the few lowest-wage workers who would benefit from the otherwise draconian changes.
"It's akin to the commissioner of the IRS sending a memo to citizens telling them how to cheat on their taxes," CWA attorney Mark Wilson said.
Here's how the game works: Under the new standard, companies will have to pay overtime after 40 hours to any employee making less than $425 a week. Right now, not all low-income workers qualify: For instance, a $350-a-week shift supervisor at a fast-food restaurant can be considered "management" and be exempt from overtime protection.
Soon, though, the labor department says - portraying itself as a big-hearted agency concerned with lifting up poverty-level workers - that fast food company will have to start paying its supervisors overtime, raising their incomes. Really? Look closer. Buried in legal documents the DOL figures regular folks will never bother with, the agency tells employers precisely how to get around the new rules.
By converting the employee's salary to an hourly rate and then dropping it - say from $10 to $8.50 an hour - the company could pay workers overtime as the law requires without spending an extra dime. The DOL regulations even do the math for companies, illustrating exactly how to cheat. Doing so, "results in virtually no (or only minimal) changes to the total compensation paid to those workers," the regulations state.
Yet here's what Labor Secretary Elaine Chao said in a news release announcing the pending changes: "Our proposal will strengthen overtime for the most vulnerable low-wage workers and allow for stronger Department of Labor enforcement of this important worker protection."
In fact, Wilson said, if workers see their hourly wages fall to compensate for overtime pay, they will take home even less money during weeks when they work a flat 40 hours. Companies could pocket the rest and still comply with the law, he said.