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Economy increases overtime tension

As employers push to get more out of each worker, a plan to overhaul overtime rules raises hackles and questions.

By JEFF HARRINGTON, Times Staff Writer
Published November 10, 2003

As a claims adjuster at insurer USAA's office in Tampa, Angie DiPiazza often worked as late as 10 o'clock weeknights to keep up with her case load. She wasn't alone. She said she used to notice other "little heads popping out of their cubicles" in the evenings.

Yet she was happy, DiPiazza said. Until she broached the idea of being paid overtime.

"My boss said he would talk to his boss," she said, "and the next thing you know I was written up for working outside my hours.

"People are so afraid if they put down the hours they work they're going to get fired. They're going to get written up. They're going to lose promotions. They're not going to get the special assignments that let them stand out. That is the atmosphere that is created."

USAA spokesman Paul Berry calls DiPiazza's allegations "absolutely not true." He said the insurance company pays overtime when warranted. The issue is now woven into a legal dispute between USAA and DiPiazza, who no longer works there.

Their tiff over time and money is age-old. Few love/hate relationships in the workplace rival overtime.

But many employment attorneys and experts say workplace tensions over overtime have worsened in recent years due in part to the uncertain economy.

Employers have been pushing to get more out of each worker to avoid adding to payrolls. And employees put in extra hours because they dared not speak up and risk their jobs during what until recently has been a "jobless recovery."

This year, the Labor Department created an uproar by proposing the biggest overhaul of overtime rules in 50 years, one that would redefine who is exempt from being paid extra for working longer hours. President Bush's administration emphasizes that 1.3-million relatively low-paid workers would be guaranteed overtime pay for the first time. Critics, including Democrats and organized labor, contend that more than 8-million higher-paid workers could lose the overtime they now collect.

The legal landscape is littered with high-profile corporate names taken to court in recent years over their handling of overtime: RadioShack, Wal-Mart, Starbucks, Albertsons, Home Shopping Network and dozens more. In 2001, for the first time, the number of class-action cases filed nationally involving overtime surpassed those filed over equal employment issues (79 to 77).

"There's a lot more awareness of the overtime pay issue than there was even five years ago," said labor attorney Sam Smith, whose Tampa firm, Burr & Smith, represents employees. His firm's workload of overtime cases has tripled since 1998.

Among overtime cases now pending in Florida, five Southwest Florida photo lab managers filed a class-action lawsuit in September against Eckerd Corp., alleging the Largo drugstore chain illegally denied them overtime pay. And Smith's bay area clients include a group of former Allstate insurance agents who say they were unfairly denied overtime.

The issue of long hours, with or without extra pay, has vexed employer and employee since the dawn of the Industrial Revolution.

Travel back to the workplace of 1848 when Pennsylvania passed a groundbreaking law imposing a 10-hour workday. Some manufacturers tried to ignore it, pushing employees to work late for no extra pay. A group of women who worked in a textile mill rioted, attacking a factory gate with axes.

Ax-wielding outbreaks aside, emotions still run high on overtime.

"I will kill anyone or anything that tries to take it away from me," said Karen Mortimer of Indian Rocks Beach, only a hint of levity in her voice.

Mortimer works for the finance unit of Xerox Capital Services LLC in St. Petersburg. At the end of every month, she routinely works late hours helping sales reps get their month-end deals on the books. She said her overtime adds up to between 10 percent and 20 percent of her salary, as much as $5,000 a year.

"If that gets taken away from me, there goes a big part of my paycheck," she said.

Seeking a happy medium

Overtime is like fame. For workers who seek it, it's often not available. Others who don't want it may find it thrust upon them.

Not that employers are enamored with everything about overtime. Companies are constantly frustrated over when to pay it, how to track it, how to decide which executives and managers are ineligible to collect it and how to avoid playing favorites over who gets it.

Finding a happy medium is a struggle. "You don't want to kill your folks. If you're working too much overtime, you're more susceptible to injuries and the efficiencies go down," said John Mahaz, St. Petersburg operations manager for circuit board maker Jabil Circuit.

Mahaz said a 50-hour workweek, including a 10-hour bundle of overtime pay, is ideal for many assembly-line workers. But it depends on whether they're single or married, juggling kids' activities or caring for aged parents. "We deal with it on an individual basis," he said. "We try to switch people (who don't want overtime) with folks that do."

The basic rules of overtime, defined by the Fair Labor Standards Act of 1938, seem simple.

Employees are entitled to time-and-a-half pay for each hour of work over 40 hours in a workweek - unless they qualify for an exemption. Employers do not have to pay overtime to higher-level workers in executive, administrative and professional jobs if they meet certain exemption tests.

But determining just who qualifies for an exemption can be a source of confusion and, sometimes, bitter litigation. Critics say the exemption tests, which were last updated in the mid 1970s, are out of date. Many people earning $250 or more a week, or just above the minimum wage of roughly $13,000 a year, arguably could be considered exempt and denied overtime.

Official numbers are hard to come by, but the Economic Policy Institute, a prolabor research organization, estimates 19.4 percent of workers put in more than 40 hours a week in 2000. It calculates that those working overtime put in an average of 11.6 extra hours a week.

For those in jobs that rely heavily on overtime - such as nurses, truck drivers, police officers and some assembly line workers - extra pay can easily account for 25 percent of their take-home income.

"Relatively few people wind up working a lot of overtime, and a lot of them actually do seek it out," said Paul Kersey, labor policy analyst with the Mackinac Center for Public Policy in Midland, Mich.

Rather than tie the right to overtime to a certain pay level, Kersey contends any revised law should allow employers and employees the maximum amount of flexibility to work out their own arrangements.

The danger in that, of course, is more companies forcing unpaid overtime on workers and more workers suing their companies.

According to Workplace Fairness, an employee rights group in San Francisco, the industries most susceptible to overtime abuse are those with many low-paying, high-volume, processing jobs such as customer service, bill collection, claims processing and mortgage loans. The restaurant business has long been the most troubled industry in all wage issues.

Historically, labor unions have pushed vigorously for overtime pay. But the waning power of unions and the probusiness climate within the Department of Labor have changed the dynamics. The AFL-CIO has attempted to mobilize members to oppose the administration's proposed revamping of overtime, saying members should tell their representatives in Congress to "stop these huge pay cuts."

Top employee labor attorneys like Jac Cotiguala of Chicago say they are busier than ever. Cotiguala said employees are just starting to "wake up" to the money they are owed for their extra hours. "Employees have bought into the lie that has been published ad nauseam for over 50 years in this country that if you're paid salary, you're not entitled to overtime," he said.

But companies and the attorneys representing them say some employees abuse the availability of overtime, working slower to make extra money. Employee allegations of unpaid overtime often seem to crop up after a separate dispute with their employer.

"Overtime is one of those things you think about when you're fired or quit the job," said labor lawyer Tom Gonzalez, who has represented large employers including the city of St. Petersburg, the city of Tampa and Progress Energy Florida.

Most companies know they have to be careful because any questionable actions could be grounds for a lawsuit. A costly lawsuit. RadioShack last year agreed to pay up to $29.9-million to 1,300 store managers who argued in a class-action case that they were improperly classified as exempt from overtime. And Starbucks agreed to pay up to $18-million to settle overtime claims alleging that California coffee shop managers and assistant managers were not properly paid.

Disputes also arise in businesses with many workers whose jobs may cross the amorphous line between professionals exempt from overtime and hourly craftspeople entitled to it. Journalists are one example.

Following a suit by a former employee in 1992, the St. Petersburg Times was audited and agreed to pay 96 staffers $31,500 in back overtime pay. In 1994, WTSP-Ch. 10 settled a dispute with the Department of Labor by agreeing to pay an unspecified amount in back overtime wages to employees who worked excessive hours during breaking news events.

Jane Peppard, the Times' director of organizational development and human resources, said the paper today is fully "aware of the expectations" to pay overtime to nonexempt staffers. "We are constantly vigilant and if any individual situation came up, we would address it immediately," she said.

Part of the problem for companies lies in the nebulous nature of overtime. Policies prohibiting discrimination by race or sex are clear-cut. But what is the "right" amount of overtime that should be allowed for a given job?

Some employees work extra hours on their own, even if they're not paid overtime. Driven by the vaunted American work ethic, they work through lunch hours, make cell calls from their car or work on their PC at home once the kids are in bed. One worker may complain about being prodded to work an hour of paid overtime while another complains about never being given that opportunity.

As employer's attorney Gonzalez puts it: "The perfect world is: "I'd like to work four hours of overtime on Wednesday ... but don't get me on Friday and don't even think about the weekend.' "

Angst and problems

Unlawfully denying overtime pay is just half the problem.

To keep valued workers from losing enthusiasm - or going job-hunting - employers have to tread lightly in compelling workers to stay late even if they are paying them.

Nancy Johnson, a retired nurse who lives in St. Petersburg, said forced overtime causes angst and potential health care problems in hospitals.

"What I always found troubling is if you're working in an operating room and you have a case that's late, you have to stay," she said. "They sort of treat you like you're lucky to have a job. From our end, it's very hard because you just can't leave your post for that patient. And they all know that."

Alicia Medeiros, an accountant with Pinellas County government, said that after the terrorist attacks two years ago, workers were pressured to work harder and longer without extra pay.

"The mandate was there is no overtime pay," she said. "Since then, that has been relaxed a bit."

But productivity pressures grew after the county cut 53 jobs over the summer.

Joyce Levesque, Pinellas County director of employee relations, acknowledges an edict to avoid paying overtime short of an emergency or special project. Instead, she said, supervisors are encouraged to work with their employees on flexible schedules or grant workers "comp time" equivalent to an hour-and-a-half per hour of overtime worked.

"We're certainly not trying to do more to the point of having to overburden the employees we currently have," she said, "and we're certainly aware of being required to pay them for the work they're doing."

Worker advocates, nonetheless, think the temptation is great to require unpaid overtime, particularly in the private sector.

Employers "have an incentive to cheat," said Cotiguala, the Chicago labor attorney. He contends some managers think "if I can get my stupid employees to work off the clock, I'm going to get a much bigger bonus."

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