Law & Courts

Overtime Debate Puts Old Problem Back In Spotlight

By Sean Cavanagh — September 17, 2003 7 min read

His workday begins at 6:15 a.m., when he takes a school bus out on his morning route near his hometown of Scooba, Miss. Two hours later, Ransom Brown is working his second job in the school cafeteria. By midafternoon, he’s driving the bus again, hauling students home before finishing the day by sweeping out the rig and cleaning its windows.

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View the accompanying table, “Working Overtime.”

A few years ago, the 61-year-old Kemper County school system employee joined the growing ranks of workers nationwide who have sued districts for unpaid overtime.

As a debate about overtime rules flared on Capitol Hill last week, educators and legal experts tried to gauge the impact on schools as they contend with the flurry of lawsuits charging that they have failed to abide by the existing rules.

Mr. Brown, who says he worked as many as 47 hours some weeks on his two jobs, said he received a settlement of about $5,900, before expenses, from the 1,400-student system.

“I wasn’t happy about it,” said Mr. Brown about the result of his lawsuit. “But I got tired of bothering them about [the overtime pay], telling them I’m supposed to have it.”

That legal scrape in Mississippi was only a ripple in a wave of lawsuits brought by mostly blue-collar school workers claiming they are owed overtime pay under the Fair Labor Standards Act of 1938.

Enacted during the Great Depression, the law established many of the most basic tenets of worker rights, including a minimum wage, and overtime—time-and-a-half pay—for work that exceeds 40 hours a week.

The statute has always exempted certain classes of workers from overtime eligibility, such as babysitters, traveling sales representatives, and many white-collar employees. In elementary and secondary schools, the list includes teachers and academic administrators, who were categorically exempted when Congress extended the Fair Labor Standards Act to public educational institutions in 1966.

Debate Over New Rules

This past March, the U.S. Department of Labor proposed a major rewrite of the regulations that govern overtime pay. The rules would alter a key salary test and make more low-income workers eligible for overtime. But they would also expand the definition of white-collar workers ineligible for time-and-a-half pay.

The changes have prompted particular opposition from Democratic lawmakers and the labor movement. Last week the U.S. Senate voted to block the provisions from taking effect. The battle could lead to a showdown with President Bush, who backs the new rules.

Labor and school officials say the new rules are not likely to prompt major changes in the way overtime works in K-12 education. The regulations would not significantly alter current rules preventing teachers from collecting time-and-a-half, even when they receive low pay.

Some school officials, however, warn that the proposed rules governing executive, administrative, and professional occupations could affect white-collar jobs in nonacademic positions, such as district financial managers and computer analysts.

Those questions emerge at a time when school districts’ overtime policies are under more scrutiny than ever. School systems with lax or antiquated observance of the federal law face the risk of costly litigation from employees who say they were paid too little, for too long.

“These districts have a moral obligation to pay people what they owe,” said Sam Brand Jr., a lawyer with the School Litigation Group, a Jackson, Miss., firm that has represented school employees in hundreds of overtime cases. “This is not a hand-out. These people have done the work.”

The law firm’s staff includes Michael A. Espy, who served as a U.S. secretary of agriculture under President Clinton. The firm’s Web site includes a U.S. map with a cluster of Southern states shaded to show where the firm has represented school workers. Other states will be highlighted before long, Mr. Brand predicts, because school employees in those states have been denied overtime, too.

“We’ll be coming to your neighborhood,” he said.

The employees seeking overtime pay include school janitors, cafeteria workers, bus drivers, teachers’ aides, and others. Some say they were encouraged or pressured to stay late, come in early, or work during lunch hours, exceeding the standard 40 hours. Others, such as Mr. Brown in Mississippi, contend that they exceeded 40 hours by working two separate jobs for their districts.

Blue-Collar Blues

Their lawyers say some workers asked for overtime and were told it didn’t apply to them. Others assumed—wrongly—that working extra hours for nothing was part of the job. Many of the suits spring from rural districts, where both sides acknowledge that recordkeeping was often poor.

The costs for districts targeted in the suits are steep. Kemper County Superintendent Emanuel Beaty said his district settled at least seven overtime suits, including Mr. Brown’s, a burden for a rural district with a $9.7 million annual budget.

“When we have to absorb that kind of a loss, it’s devastating,” said Mr. Beaty. The superintendent, who confirmed the approximate amount Mr. Brown was paid, believed the bus driver had been owed some overtime, but not as much as he had maintained.

Meanwhile, the Lowndes County, Ala., school system is facing some 100 overtime suits.

Daniel Boyd, the 2,650-student district’s chief officer of operations, said some of those workers had legitimate claims. Some of the trouble, he said, stemmed from policies that allow employees to hold two positions within the district, which is in a community where jobs are scarce.

“The school system provides an economy of its own,” Mr. Boyd said. “We were a little shocked ... because we pride ourselves on treating all employees fairly, and with respect.”

The North Carolina School Boards Association recently completed a “compliance checklist” that advises districts to keep detailed time records and decide whether overtime-eligible employees are allowed to participate in volunteer activities outside of school hours. In some cases, districts may be at risk of having to pay workers for some of those activities, the association says.

Jim Keith, a Jackson, Miss., lawyer whose firm has defended school districts in 45 overtime cases in that state, said most were settled out of court, with workers typically receiving between $4,000 and $6,000 each.

While he conceded that some claims were legitimate, Mr. Keith also believed many districts that settled lawsuits simply did not have the records to counter other, more dubious assertions.

Many districts typically have allowed employees to keep informal work schedules, Mr. Keith suggested, with flexibility for breaks throughout the day. Now, with lawsuits, districts were paying for their kindness, he suggested.

Employees “liked the freedom of not having to punch a clock,” the lawyer said. “Those days are over.”

School Impact Weighed

Even with teachers and most administrators exempt from the Fair Labor Standards Act, education groups have been paying attention to the battle over the Labor Department’s new overtime regulations.

The department’s proposal, published March 31 in the Federal Register, is meant to simplify the tests for determining which white- collar jobs are exempt. The proposal would raise the minimum income under which many classes of employees are guaranteed overtime eligibility from the current $8,000 or less per year to $22,100. The income test does not apply to teachers.

The Labor Department says that some 1.3 million workers would become eligible for overtime with the change in the income floor, while some 640,000 others would lose their eligibility under the other changes.

The Economic Policy Institute, a labor-backed think tank in Washington argues that as many as 8 million would become ineligible.

Last week, the Senate voted 54-45 to block the regulations from moving forward. With the House having approved the new rules during the summer, the next step will likely come when a conference committee takes up the separate versions of the Labor-Education- Health and Human Services appropriations bill, which is where the Senate placed its roadblock.

President Bush has indicated he will veto the appropriations bill if Congress blocks the new overtime rules.

Several education law experts said the proposed regulations would have a relatively minor impact on school employees.

“I don’t know if it will play out in the schools,” said Lisa Soronen, a staff lawyer for the National School Boards Association, which filed two pages of relatively brief comments with the Labor Department.

One proposed change that worries the group would revise the “executive” exemption to clarify that employees aren’t eligible for overtime if they have the power to hire or fire workers, or to recommend such changes in an employee’s status. Because some states reserve such decisionmaking to school boards, the proposed regulations could make more midlevel managers eligible for overtime who aren’t now, at a cost to districts, said James C. Hanks, a lawyer in Des Moines, Iowa.

Mr. Hanks, a former chairman of the Council of School Attorneys, a group affiliated with the NSBA, also questioned the proposed increase in the floor under which employees are guaranteed overtime.

In some small, rural districts, administrative-staff members might earn less than $22,100 now, and so the regulations could create a new group of workers eligible for overtime, he said.

“Even after they’re made final, we won’t know their impact until these regulations are put into effect,” Mr. Hanks said.

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