Industry Pushes Labor Law Changes

Infotech companies want to classify their sales staff as professionals, averting the need to pay them overtime

P> A consortium of companies and associations have banded together to protect their telemarketing efforts from the decades-old Fair Labor Standards Act.


The changes are needed to reflect the growing role of telemarketing, which did not exist when the act was written in the 1930s, say industry officials, who have formed an ad-hoc group called the Flex Coalition to lobby for the change.

"We have a modern workplace, and we need to have modern regulations," said Craig Sadick, a lobbyist for the Washington-based National Association of Wholesaler-Distributors.

The labor act requires all companies -- except those in the retail and services sector -- to treat their office-based salespeople as hourly workers eligible for overtime pay. The coalition-supported HR 1226 would allow all companies, including those in hardware manufacturing or software development, to treat their telemarketing staff as professionals not eligible for overtime pay. That change would essentially give telemarketers the same professional status as on-the-road salespeople -- thus allow companies not to pay them overtime.

Without the change, companies are reluctant to allow their sales staff to work beyond 40 hours per week, said David Hughes, general counsel for Lawrence, Pa.-based Black Box Corp., which sells computer equipment via catalogs to businesses. Hughes chairs the Computing Technology Industry Association's subcommittee on labor issues.

The companies began their effort to amend the act after the Department of Labor audited some companies and forced them to pay overtime to their sales staff, said Bruce Hahn, a Washington-based lobbyist for the CTIA.

But the measure is unlikely to pass this year unless it is rolled into a large-scale congressional rewrite of the labor act, said Joe Flader, a staff assistant to Rep. Thomas Petri, R-Wisc., who supports the proposed changes.

Among the groups in the Flex Coalition are the Chicago-based Computing Technology Industry Association, Philadelphia-based Bell Atlantic Corp., as well as others such as the National Beer Wholesalers Association. The coalition was created by the Washington-based Labor Policy Association, whose members include Sprint Corp., Kansas City, Mo., and Ameritech Corp., Chicago.

Members of the coalition recently met with congressional staffers to help promote a bill that would amend the 1938 act. HR 1226, is sponsored by Petri and Rep. Harris Fawell, R-Ill.

To win, the Flex Coalition must find enough support to pass the bill and override a presidential veto. Their main opponent may be the Washington-based Service Employees International Union. Deborah Dietrich, a lobbyist with the union, said the group would oppose HR 1226.

The bill will be reviewed and voted on by the Committee on Economic and Education Opportunities, chaired by Rep. William Goodling, R-Pa. The committee held a hearing on the bill last October, but has not yet scheduled any further hearings or votes, said a staff member. It is possible that the bill may be passed by the end of the year. Although an identical bill was introduced in 1994 by the then-Democrat chairman of the committee, it may be held up by Democrat opposition, she said. However, "the bill is gaining support from a broad range of industry," improving its chances for passage, she said.


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