Dems Tie Up Tax Bill in FLSA Protest

March 25, 2004 ( - In protest of the Bush administration's plans to rewrite the "white collar" exemption provisions of the Fair Labor Standards Act (FLSA), U.S. Senate Democrats stalled a corporate tax bill's march through Congress.

Even though the Democrats are protesting the proposed FLSA changes, the tax bill in question has nothing to do with the amendments.   The effect of the legislative deadlock though sends ripples far past overtime issues, since included in the corporate tax bill is a tax cut for American manufacturers that also carries the keys to ending a trade dispute with Europe, according to an Associated Press report.

>Democratic Presidential hopefully John Kerry (D – Massachusetts) characterized the move to alter FLSA as Republicans aligning with big business at the expense of the working class.  Once again, Republicans have put the profits of big business ahead of the pay that eight million American workers have earned,” Kerry said.

But Republicans were quick with the rebuttal, calling the Democratic stall tactics partisan politics.   “This is a partisan game that’s being played of gridlock here in Washington, D.C., and it’s about playing politics, presidential politics, on the floor of the United States Senate,” Senator Rick Santorum (R – Pennsylvania) said.  

FLSA Changes

The U.S. Department of Labor’s proposed changes to FLSA would be the first comprehensive overhaul in more than 50 years of the white-collar exemption tests used to determine whether an employee must be paid overtime or is exempt from the minimum wage and overtime requirements. Currently, there are three tests for whether or not an employee is ineligible for overtime:  the employee’s level of pay, whether or not the employee is a salaried or hourly worker, and whether or not the employee performs certain job duties.

As the rules stand, any employee making more than $155 a week (about $8,000/year) could be excluded from overtime, if they had a salary and a job description that fell into certain categories.  The proposed regulations would have lifted the cutoff to $425 a week (about $22,100/year), a step the DoL contends that could add about 1.3 million lower-wage workers to the ranks of people eligible for overtime (See White House Proposes Overtime Rules Overhaul ).   However, critics say the DoL’s figures are inaccurate, when in fact the effect of the FLSA change would threaten overtime pay for as many as 8 million workers, including many white-collar workers and veterans now eligible for extra wages.

Democrats have a dog fight on their hands in an attempt to prevent the rule change, or even just to push it back.   In January, U.S. Secretary of Labor Elaine Chao was defiant in a Senate committee hearing headed up by FLSA amendment opponent Arlen Specter (R – Pennsylvania).  In the hearing Specter had asked Chao to delay the possible March 31 implementation of amendments to regulations until September.  However, Chao said “enough time has been spent on delays and studies of all sorts,” telling Specter she is more concerned about the $2 billion dollars a year employers are spending on “needless litigation” brought by workers seeking overtime pay (See  Chao: FLSA Amendments Going Into Effect March 31 ).