WASHINGTON : Lawmakers Scrambling to Restore Benefits for Older Workers

True or false: Older workers enjoy the same benefits as their younger counterparts.

True once. False today.

With a U.S. Supreme Court ruling last June, 20 years of legal precedent went up in smoke. Although the court agreed that in matters of hiring, wages and firing, age discrimination is against the law, it ruled that the same law does not cover benefits, such as severance pay, employee group insurance and disability income.

The case that returned the Age Discrimination Employment Act to the headlines after two decades of occasional legal skirmishes involved June Betts, a former speech pathologist for Hamilton County, Ohio. She was diagnosed with Alzheimer’s disease at age 58, yet managed to work until she was 61.

Her dedication led to her eventual problems. Under Ohio’s public employee pension plan, disability retirements are permitted only through age 60. Had Betts retired earlier and taken disability pay, she could have collected $350 a month. Because she waited, she receives only $158 a month, the usual early-retirement pay.

“Ohio PERS (Public Employees Retirement System) is penalizing my mother for working as long as she was physically and mentally able to work, by denying her the benefits she has earned,” Carolyn Betts, a daughter of June Betts, wrote in a May 9 letter to President Bush.

Betts sued, arguing that the Ohio law was discriminatory. The lower courts ruled in favor of Betts, relying on the “equal benefit or equal cost” rule established by the Labor Department in 1969.

Since the Supreme Court reversed the lower courts and went against Betts last summer, Congress jumped into the fray. Members from both parties are scrambling to restore things to where they were before the ruling.

Sens. David Pryor (D-Ark.), Howard Metzenbaum (D-Ohio) and James Jeffords (R-Vt.), have proposed the older workers benefits protection bill. It passed the Labor and Human Resources Committee in February and will arrive on the Senate floor with 41 co-sponsors within the next month.

Reps. Augustus Hawkins (D-Los Angeles), Matthew Martinez (D-Monterey Park), Edward Roybal (D-Los Angeles) and William Clay (D-Mo.) are sponsoring similar legislation in the House, where they have garnered more than 100 co-sponsors. The House bill is expected to come up for a vote after the Senate acts.

Both bills state that the age discrimination legislation prohibits bias in employee benefits, and both reinstate long-standing “equal benefit or equal cost” regulations. Both bills also would stop employers from using anything other than retiree health benefits as an offset against non-age-related benefits, such as severance pay.

“The pensions of America’s workers are federally protected and this provision will prevent employers from using pensions to deny other benefits to older workers,” said Pryor. “It will also act as an incentive for more employers to offer retiree health benefits.”

Although the Bush Administration initially supported the Betts’ family’s efforts, filing a “friend of the court” brief and testifying before Congress on their behalf, it has had a change of heart and threatened to veto the legislation.

The legislation has the support of advocacy groups for the aging, such as the American Assn. of Retired Persons, and major labor unions. Business and industry groups, such as the National Assn. of Manufacturers and the U.S. Chamber of Commerce, applauded the Supreme Court’s action and are lobbying heavily against both bills.

“We are strongly opposed to the legislation as it is written because rather than provide increased benefit protection to older workers, we fear it would ultimately result in fewer benefits to all employees,” said Ed Gilroy, associate director of employee benefits and compensation at the National Assn. of Manufacturers.

Repairing a Snafu in Minimum Wage Law

There is some costly confusion on Capitol Hill about a provision of the new Minimum Wage Law. While raising to $500,000 a year in revenue the threshold at which a business must pay the minimum, an old exemption covering interstate commerce somehow disappeared. That means that for many enterprises, the small-business exemption is no more.

As the law now reads, any employee engaging in interstate commerce must be paid the federal minimum wage, regardless of the employer’s annual revenue. That means that the guys unloading a grocery truck that crossed state lines must receive minimum wage. And the clerk who places a telephone order must be paid minimum wage, as must the waiter who accepts an out-of-state credit card.

“In effect, this makes the small-business exemption useless, particularly in a business like a restaurant, where 70% of the employees might be engaged unwittingly in interstate commerce,” said Mark Gorman, senior director of governmental affairs at the National Restaurant Assn.

Help may be on the way. Rep. Steve Bartlett (R-Texas) is drafting an amendment that he hopes will remedy the situation.

“It was clearly unintentional,” he said. “The language of the statute was clear that we were eliminating many of the complicated exemptions and replacing them with a one-size-fits-all threshold of $500,000. I’m told by attorneys that it was misdrafted and resulted in the practical elimination of the small-business exemption.”

Bartlett said he expects the amendment to pass easily.

Chamber’s Ambitious Educational Goals

The U.S. Chamber of Commerce has gone back to school: It has founded the Center for Workforce Preparation and Quality Education.

The chamber hopes to find answers to the country’s education woes on the local level and provide a bridge between community business leaders and local educators.

“For employers, a deficient education system means an ill-prepared work force, a decline in product quality, and an inability to compete,” said the chamber’s prospectus for the program.

The center has adopted the same goals for the year 2000 that President Bush established last fall: Have all children start school ready to learn through an expanded preschool program, such as Head Start; increase the high school graduation rate to 90%; have American students rank first in the world in math and science; improve the adult literacy rate to 100%; and rid schools of drugs and violence.

Information is available through the chamber at 202-463-5525.