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THOMAS A. KOCHAN

Bringing family values to the workplace

WORKING FAMILIES and employers beware. The political debate over family values is turning to the workplace. Last week the Bush administration implemented new rules governing who is eligible for overtime; his campaign is also set to unveil a "flextime" policy that would allow compensatory time off in lieu of paying overtime for hours worked beyond the standard 40-hour work week. Senator Kerry denounced both proposals and responded by proposing to expand access to the unpaid leave provisions in the Family and Medical Leave Act to employees of small firms and to increase funding for after-school programs.

It is about time the debate over how to instill family values into the workplace gets started. Whoever is in the White House must address updating America's 60-year-old employment practices to create a flexible family-centered policy suited to the needs of the modern economy.

Why? Today it takes two working adults to make ends meet. The only families that realized an increase in their real incomes and living standards in the last two decades were ones with two college educated working parents. And three fourths of these gains came not from higher wages, but from the longer hours women added to the labor force.

Business needs all this talent to meet the demands in today's 24/7 economy. Yet our workplace policies are still based on the 1930s assumption of a male breadwinner with a wife at home . This model now fits less than one quarter of the workforce. Thus working families and their employers have a big stake in modernizing workplace policies.

Let's take a closer look at the candidates' proposals.

The new overtime rules will better protect some low paid "managers" at places like McDonalds and Wal-Mart by raising the minimum salary for exempt employees to $23,660. But the net effect will be to reduce the number covered by overtime protections by an estimated 6 million employees. One of the most senseless changes would exempt employees who volunteer to be "team leaders" for projects aimed at improving productivity or customer service.

President Bush's "flextime" proposal would no longer guarantee time and one-half pay beyond 40 hours, as has been the nation's standard for over 60 years. Instead, employees could receive compensatory time off . They could also be denied overtime if they worked less than 80 hours in any consecutive two week period. But there is a hitch. By doing so they will forfeit the wage premium they would have otherwise received for the excess hours. In effect, this amounts to a wage cut and an incentive for firms to "ask" employees to work longer hours for less pay.

John Kerry's plan to expand unpaid family leave is a good starting point. But government survey data show the biggest reason why employees cannot take time off is they can't afford the lost wages. At some point the federal government has to encourage all states to do what California did this year -- design ways for employees and employers to fund paid leave plans. President Bush rescinded a rule that encouraged this shortly after taking office.

But these are just the starting points for updating the workplace to be more family-centered. Health insurance coverage has to become portable and universal. John Kerry's proposal to cover children is a first step . President Bush's proposal for medical savings' accounts would help higher income employees supplement the coverage they likely already have.

Ultimately, we have to give working families a stronger voice on their jobs so that they can negotiate their own flexible schedules and compensation arrangements. It is not surprising, for example, that compensatory time options similar to President Bush's proposal are common in the public sector where nearly 40 percent of employees are covered by collective bargaining contracts and most others by civil service rules that give them a voice in enforcing these policies. So why not make a new trade-off? Where employees have an independent voice to negotiate and enforce working hour provisions to increase flexibility, let them do so. Where these are absent, enforce the existing 40-hour overtime standards. This is the kind of family centered policy incentive government needs to offer business and employees to allow them to bring workplace policies into the 21st century. So as the debate over family values turns to the workplace, working families and progressive employers should ask which candidate is going to give them the tools to do so -- and then hold his feet to the fire once in office.

Thomas A. Kochan is co-director of the MIT Workplace Center and George M. Bunker professor at the MIT Sloan School of Management. 

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