[lbo-talk] overtime pay, again

Eubulides paraconsistent at comcast.net
Sun Aug 31 12:25:02 PDT 2003


New Workplace, Old Fight Workers Struggle for Overtime Pay as Firms Seek to Boost Productivity While Cutting Costs

By Kirstin Downey Washington Post Staff Writer Sunday, August 31, 2003; Page F01

Linda Hulse said she felt she just could not stop working when a big blizzard hit in February.

Hulse, a maintenance engineer at a 100-acre apartment complex in Plainsboro, N.J., said she already felt strained over the past five years, as the owner of the complex cut its maintenance staff from 11 workers to three and expected them to work 60 hours a week, sometimes more. Her frequent pleas for more help had been ignored because executives felt constant pressure to shave labor costs, she said.

Then the storm swept through, and she and the two men she supervised worked for 72 hours clearing snow. She slept only about six hours total over three nights, she said. At one point, she noticed tears were streaming down the faces of her co-workers, 55- and 48-year-old men.

"We were crying; we couldn't go on anymore," Hulse said. "But you couldn't walk away. . . . It was surreal. Everybody kept trudging along because you have to pay your mortgage, you have to pay your rent."

Hulse, 40, became ill and was hospitalized. While she was recuperating, her employer, Aimco, a Denver-based real estate investment trust, fired her for failing to report for duty, she said. Early this month she joined a lawsuit against Aimco, alleging it broke federal labor laws for several years by demanding long hours and refusing to pay its employees overtime. Aimco officials, however, said that the lawsuit has no merit and that they pay overtime when employees work extra hours.

Business groups and labor activists agree that many companies, pressured to hold down costs in a globally competitive environment, often ask employees to work longer than the standard American 40-hour workweek. And when the work is voluntary and fairly compensated, they say, that's a good thing -- for the employees who want the extra income and for the economy in general.

But labor experts also worry about the danger for exploitation in a slow economy, as companies continue to slash thousands of jobs every month and many workers feel they can't afford to say no to employers' requests.

In the United States, unlike many other industrialized countries, there are no federal laws limiting the number of hours that employees are compelled to work. But the Fair Labor Standards Act of 1938 set a workplace standard of 40 hours a week by requiring employers to pay non-management workers time-and-a-half for every extra hour worked in one week.

Today, dozens of lawsuits across the country -- including ones against Wal-Mart, Geico and other firms -- allege that employers are violating state and federal labor laws by not paying employees the overtime wages owed them, and in some cases not paying them at all, for hours worked beyond the 40-hour workweek.

Seth D. Harris, director of the labor and employment law programs at New York Law School and a Labor Department official in the Clinton administration, said the rash of lawsuits indicates that companies are trying to evade the overtime rules to gain economic advantage over companies that follow them.

"A sizable number of cases involve employers testing the boundaries of current regulations to avoid paying overtime to their workers or some subset of their workers," Harris said.

"Employers in hard economic times are looking for ways to sustain output at the same or lower cost, and if you can keep people working extra hours without paying a premium you can increase your output," he said.

Willard A. Workman, senior vice president for international affairs at the U.S. Chamber of Commerce, who studies global employment issues, said many companies are asking fewer workers to do more work, but that this is generally beneficial for the country because it boosts productivity -- the amount of output produced for each hour worked -- which, in turn, lifts the American standard of living.

"Over the past five to seven years, we've increased our productivity," Workman said.

Businesses are under "enormous pressure," he added, to produce goods and services at the lowest prices as quickly as possible within a global economy that is still integrating new technologies into the workplace.

"We're as businesses still experimenting with how we best use these technologies, and nobody's quite got it right yet," he said.

History of Clashes

Battles over long work hours are an old story in America. From 1880 to 1930, employers and workers engaged in a fierce and sometimes bloody tug of war between production needs, cost pressures and work schedules. In May 1886, labor organizers launched a series of strikes and demonstrations nationwide in support of the eight-hour workday, at a time workers were typically required to work 10 to 12 hours per day. Some of the strikers were killed in Chicago's Haymarket Square and others in Milwaukee.

In 1903, striking mill workers in Kensington, Pa., including thousands of children, demanded that their schedules be reduced from 60 to 55 hours a week. To highlight the problem, famed labor activist Mother Jones organized a children's march from Pennsylvania to President Teddy Roosevelt's home in Oyster Bay, N.Y. He didn't meet with them, but the march through New York City, with children holding signs saying "55 Hours or Nothing," attracted much attention. The strike failed, but in 1909, Pennsylvania passed a child-labor law limiting workweeks to 58 hours.

Long work hours were also a key concern in the anthracite coal strikes in Scranton, Pa., in 1902 and in the mill strikes in Lawrence, Mass., in 1912. When violence erupted in Lawrence, families sought to send their children to safety in New York. Local police beat and jailed the women and children, a spectacle that sparked a congressional investigation. The strikers there won a 54-hour workweek, with no cut in pay.

The Great Depression proved a turning point with the passage of legislation in the New Deal that governed work schedules. The 40-hour workweek was a compromise measure after a popular bill to enact a 30-hour workweek passed the Senate. Eight-hour days, five days a week, became the national norm.

During the boom years of the 1990s, when many companies suffered a labor shortage, forced overtime became a contentious issue in some contract negotiations.

More recently, after a recession and amid a sluggish recovery, the Bush administration provoked debate by proposing changes in federal overtime rules. The Labor Department is seeking to make it easier for businesses to reclassify some employees as "exempt" from overtime pay, meaning they could avoid paying workers time-and-a-half for more than 40 hours. Administration officials say the changes are long overdue in an era of telecommuting and electronic communication, and that the existing rules are outdated. They also say they want to discourage the raft of costly lawsuits being filed by workers who allege their employers are violating labor laws.

Because the administration is proposing to change existing rules, rather than trying to change the 1938 law itself, the policy is not subject to congressional approval. But that has not stopped some Capitol Hill opponents from trying to block the change by withholding funding for the department, and it is not clear whether the administration will succeed.

'Workaholics' in the U.S.

Americans work more than many other people in developed economies, according to a recent report by the International Labor Organization, a United Nations agency that monitors workforce conditions. The ILO found that American workers put in an average of 1,825 hours per year, far more than workers in most European nations. French workers, by contrast, are employed an average of 1,545 hours per year, and German workers about 1,444 hours.

"In relative terms, Americans are workaholics among advanced industrialized countries," said the Chamber of Commerce's Workman.

According to Lawrence J. Johnson, chief of the ILO's employment-trends team, "there's been a decision in Europe to work less and less hours, a decision made culturally."

"The European Union and the United States have two different systems and react to economic conditions differently. . . . A lot of what Europeans have -- longer vacations, shorter hours -- are legislated, and in the United States, it is handled through collective bargaining," he said.

Or rather, such working conditions are determined through labor negotiations for the shrinking portion of the workforce represented by unions. Collective bargaining has become a less powerful tool for workers because of the diminished clout and reach of the labor movement, Johnson and others said. Today, only 13 percent of workforce is unionized, down from a third of all workers at labor's zenith in 1955.

For some workers, the courts offer another avenue for resolving workplace disputes.

Wal-Mart Stores Inc., the nation's largest retailer, is facing 37 lawsuits, in 29 states, from employees who allege they were illegally forced to work extra hours free to meet corporate productivity demands, according to Wal-Mart officials.

In December, a federal jury in Portland, Ore., found Wal-Mart guilty of asking workers to clock out and then return to work unpaid. About 400 current and former Wal-Mart employees participated in the lawsuit, with some workers testifying that they falsified their time records to keep their jobs because they live in small towns with few other jobs.

"Wal-Mart's policy is to pay associates for every minute they work," Christi Gallagher, a Wal-Mart spokeswoman, said in an e-mail. "Any manager who requires or even tolerates 'off-the-clock' work would be violating company policy and subject to disciplinary action, up to and including termination." Wal-Mart lobbyist Erik Winborn said the company makes sure its sales associates work 40 hours or less because it does not like to pay overtime.

Gallagher said the information presented at the trial was "anecdotal" and "inconsistent with the experiences of the majority of Oregon" stores. Wal-Mart employees "are fully compensated for their excellent and hard work," she said.

About 270 insurance claims adjusters have filed suit in the U.S. District Court in Washington, D.C., alleging that their employer, Geico, broke the law by improperly classifying them as workers exempt from overtime pay. "You have to put in the hours, or you end up losing your job because you can't keep up production," said one Washington area Geico claims adjuster who did not want his name used. "It's almost like an assembly line. If you even take a break for a second, it'll turn into a major bottleneck."

Eric Hemmendinger, a lawyer for Geico, said the company believes it properly classified the auto adjusters as exempt from overtime pay because they are administrative workers who set their own schedules. He said their hours vary a bit depending on the volume of claims, such as after sleet storms, when car accidents are more common. "We think it averages out to a reasonable workload," he said.

Driven to Long Hours

But the deep-rooted American work ethic also propels many workers to choose to spend extra hours on the job. Stan Fortune, 47, a former Wal-Mart manager in Weatherford, Tex., said he felt driven to climb into store management ranks during the 17 years he worked there. On one temporary assignment in Las Vegas, he said, he worked 13 to 14 hours a day from Sept. 1 through Dec. 26, with only one day off.

"It builds up to where that's the norm," said Fortune, now a union organizer for the United Food and Commercial Workers, which is seeking to organize Wal-Mart workers. "You get three or four hours' sleep. It becomes what you are used to. Now that I look back it's pretty sad.

"You want to get to the next step and you do whatever it takes to get there. It drives you."

Carolyn Thiebes, a former personnel manager at Wal-Mart who is the lead plaintiff in the Portland case, said that the company created an environment where people felt inspired to make personal sacrifices for it. She recalled that one assistant manager at the Wal-Mart store in Dallas, Ore., slept on a padded bench in the break room three nights in a row during inventory to show his commitment to getting the job done on time.

"Wal-Mart has a way of embedding the spirit of the company, so associates will do just about anything to make sure their store does well," said Thiebes, who now works for the state government.

Such stories sound familiar to Harry Kelber of Brooklyn. Kelber, 89, is the editor of the Labor Educator, a union newsletter. "It reminds me of the early 1930s," he said.

In 1933, Kelber worked in a Brooklyn grocery store as a clerk -- 12 hours a day Monday through Friday and 17 hours on Saturday. He and his co-workers went on strike and got their hours cut, he said, but the big change occurred after the Fair Labor Standards Act passed, when workers had an eight-hour day for the first time.

"I remember walking out of the place in the daylight," he said. "When the hours were reduced, people were amazed, almost felt guilty to leave after only eight hours. I couldn't believe it."



More information about the lbo-talk mailing list