Elaine Chao is looking out for you!

Rebecca Hagelin
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Posted: Oct 08, 2004 12:00 AM

The dark images of Enron and disturbing headlines of other dirty dealings by the unethical chieftains of some big businesses in recent years set America on a course of holding corporate executives accountable for the money they control. But what about the chieftains of Big Labor?

Consider: John Sweeney, president of the AFL-CIO, has said, "transparency, accountability and full and accurate disclosure should be central goals of financial regulation." Of business. But try to apply those reasonable standards to Sweeney's own organization, and he sings a different tune.

Secretary of Labor Elaine Chao knows all about this. She incurred the enmity of Sweeney and other labor leaders in December 2002, when she proposed new rules to strengthen the accounting requirements for labor organizations. Secretary Chao had the temerity to suggest that union members had a right to know where and how their mandatory dues are being used, just as stockholders now can know where their money goes.

Does the money workers contribute to their unions go to represent them and others at the bargaining table or to provide pension plans and other benefits? Or are union honchos wasting it on lavish personal dining and entertainment expenses? Workers have a right to know the truth.

Most reporting requirements for unions date back to 1959, when the organizations were smaller and simpler in structure. The rules allow dangerous amounts of wiggle room. Major expenses can be reported in lump sums under vague categories such as "education and publicity expenses" and "professional fees." Unions can go in with each other to establish subsidiaries such as credit unions or joint strike funds, and they need not be disclosed unless they are wholly owned by one union.

Secretary Chao called for detailed disclosure of major receipts and disbursements and full disclosure of subsidiaries and trusts, such as credit unions. Opponents called the rules onerous, costly and burdensome, particularly to small unions, even though Secretary Chao's proposed standards were to apply only to unions with more than $250,000 in annual receipts ? or about the largest one-fifth in the country.

Union bosses went to work on Congress, but common sense prevailed, and we should see the first of the new disclosure reports next July.

But Big Labor efforts to gum up the works on disclosure reform pale in comparison to the misinformation campaign launched against another Chao initiative ? the proposed new rules on eligibility for overtime. Almost as soon as the new rules were published, a study followed from the pro-union Economic Policy Institute that claimed 6 million workers would lose overtime protection under the new rules. According to the Heritage Foundation, the EPI's analysis is "riddled with inaccuracies" and should be discounted by the general public and policymakers.

The fact is, nationwide, as the Heritage Foundation reports, nearly 1.3 million low-income white-collar workers who do not currently receive overtime protections would become eligible under the new regulations.

The rules are updates to the Fair Labor Standards Act of 1938, which, among other things, established the 40-hour workweek and mandated that non-executive employees required to work more than 40 hours per week receive time-and-a-half pay. The rules relate to who is considered a supervisor or executive ? and thus not eligible or exempt from the time-and-a-half requirement ? and who is not.

Most of the 15 pages of new rules are aimed at clarifying and simplifying the tests for which employees are considered overtime eligible to update them to fit the modern workplace. Many of the regulations affected have not been updated for 50 years, and changes in the workplace have brought considerable confusion and opportunity for abuse. For example, employers can designate workers who make as little as $8,060 per year as supervisors and thus get around paying them overtime. The rules raise that $23,660, which will make hundreds of thousands of low-level supervisors, such as those who work at burger joints and ice cream shops, eligible for overtime.

There have been numerous attempts in Congress and elsewhere to overturn these basic, fair concepts designed to protect the "little guy," and those who oppose the new rules still could hold the Labor Department appropriations legislation hostage.

Bill O'Reilly frequently asks the question, "Who's Looking Out For You?" When it comes to workers, that someone is Elaine Chao.