Says "legislation pending in the House would effectively limit or eliminate ‘time-and-a-half’ for people who work overtime."
Armond Budish on Thursday, March 17th, 2011 in a letter to editor in The Plain Dealer
State Rep. Armond Budish says pending legislation would limit or eliminate 'time-and-a-half' overtime pay
Ohio House Democratic Leader Armond Budish has vowed to "fight like hell" against the plan to narrow public workers’ collective bargaining rights, known as Senate Bill 5.
Behind the tough talk is a strategy to enlist more than the union workers who have become the face of the SB 5 opposition. Budish and Democrats want all middle-class, working Ohioans to join the fight.
Budish’s message to recruits: Republicans are engaged in a full-scale war against the middle class. The Beachwood Democrat issued a warning in a letter to The Plain Dealer published March 17.
"For example, legislation pending in the House would effectively limit or eliminate ‘time-and-a-half’ for people who work overtime."
Budish’s claim piqued PolitiFact Ohio’s interest because time-and-a-half has been a standard pay scale for overtime work for decades.
The legislation Budish referenced is House Bill 61, which two Republicans introduced in January. A House committee recommended the bill for approval earlier this month, although all Democrats on the committee voted against it. The bill has not been up for a full floor vote yet.
The pending legislation would allow certain workers to receive one hour of compensatory time – paid time off – rather than overtime wages for each hour worked exceeding 40 in a week.
Federal and state labor laws require most employers pay time-and-a-half for overtime.
HB 61 would allow workers to accumulate up to 240 hours of comp time. At the end of a year, employers would have to pay overtime wages for any unused comp time.
There are two key issues in Budish’s claim.
- Does the bill allow employers to abuse their authority and force workers to take comp time instead of overtime wages?
- How many Ohio workers would HB 61 affect?
Let’s start with the second issue.
HB61 would cover private employers (with some exceptions) with annual gross sales between $150,000 and $500,000, according to an analysis by the nonpartisan Ohio Legislative Service Commission.
About 10,000 members of the Ohio chapter of the National Federation of Independent Business have self-reported gross receipts between $100,000 and $500,000, said Chris Ferruso, legislative director for the organization.
Businesses with sales above $500,000 already must comply with federal overtime laws.
"A lot of this is aimed at very small businesses," said Tony Seegers, director of Labor and Human Resources Policy for the Ohio Chamber of Commerce. "It’s not going to be a lot of employers, but it’s going to be some of the smaller ones."
The Ohio Chamber of Commerce and the Ohio NFIB support HB 61.
As for the first issue, HB 61 supporters note that workers would get to chose between comp time and overtime pay. The bill says employers cannot require workers to take comp time. And workers are supposed to initiate the exchange for comp time. The bill also bars employers from threatening, intimidating or firing workers who want overtime wages.
Columbus attorney Fred Gittes called the voluntary nature of the bill "a charade."
Gittes’ argument speaks to the core of Budish’s claim that the bill "would effectively limit or eliminate" time-and-a-half pay for overtime work.
Gittes argues that employers could force their workers to take comp time instead of overtime because the bill lacks teeth to discourage the from doing so. He testified against the bill on behalf of the Ohio Employment Lawyers Association.
Employers would have a financial motivation to press workers to take comp time. Comp time would be awarded on a one-to-one ratio for extra hours worked. An employee who worked two extra hours, for example, would get two hours of comp time. That’s a cheaper arrangement than paying time-and-a-half for each overtime hour worked.
Gittes argues that the penalties are too weak for employers who break the rules.
The bill has no provisions to help a worker get his job back or to recover lost wages. Instead, employers who force workers to take comp time would be fined double the worker’s hourly wage for the number of comp time hours involved in the violation, plus attorney fees and court costs.
Federal overtime laws include employer penalties that allow a worker to regain their job and wages lost from the time of their firing. Gittes said he has discussed with the bill’s sponsors the inclusion of such language, but it has not been added.
The monetary difference resulting from stiffer penalties could be vast.
Take, for example, the case of a worker with a $10 per hour wage who was fired for refusing to accept 200 hours in comp time.
If the worker prevailed in court, under HB 61, he would be awarded about $4,000.
If the same worker won a lawsuit under federal labor laws, he could win his job back and wages covering those that were lost from the point of termination.
"What employer will continue to pay time-and-a-half for each hour of overtime if they can effectively force employees to agree to take comp time at their normal rate of pay?" Gittes said in his testimony to the House Small Business and Economic Development Committee.
So where does Budish’s claim rate on the Truth-O-Meter?
- Budish is correct that the bill would provide a means to limit time-and-a-half pay. And while Gittes’ conclusion is tinged with cynicism, unscrupulous businesses do exist. But voluntary choices made by employees also could limit time-and-a-half.
- Budish’s statement simply describes the affected group as people who work overtime, but the changes in HB 61 would only have an impact on smaller businesses. That’s information that provides clarification.
We rate Budish’s statement as Mostly True.