Senate Votes to Temper Overtime Rules

The U.S. Senate voted yesterday to block an aspect of the new overtime regulations that could have ended a flood of lawsuits seeking back pay from foodservice employers.  

The lawmakers, in a relatively close vote, approved a measure that would prevent the new rules from denying overtime wages to anyone currently entitled to time-and-half for work time exceeding 40 hours a week. In recent years, a number of restaurant employers have been sued by managers claiming they were entitled to that premium pay scale because the tasks they performed were identical to the work of subordinates collecting overtime. The plaintiffs allege that their duties were not managerial in nature, and hence should not be covered by the overtime exemptions that apply to management personnel.

The rules issued last month by the U.S. Dept. of Labor would have likely ended the lawsuits by redefining management personnel. The new criteria would have clearly applied to restaurant managers and assistant managers, according to the NRA.

By stating that anyone entitled to overtime by the old rules would continue to quality under the new regulations, the Senate's stipulation clouds the issue once again.

However, Beltway observers were quick to note that the measure has to clear a number of additional hurdles before it takes effect. The qualification was offered in the form of an amendment to a corporate tax bill that has yet to move forward in the Senate after months of consideration. Even if that tax proposal is approved by the Senate, it would still have to be weighed by the House.

The Bush Administration quickly mustered a defense of its new regulations. U.S. Wage and House Division Administrator Tammy McCutchen told a Senate subcommittee that yesterday's stipulation, put forth by Sen. Tom Harkin, a Democrat from Iowa, could backfire and deny overtime to many workers who would otherwise be covered under the new rules.

The revised regulations are scheduled to go into effect in August.


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