Labor Dep't re-writes overtime rules to benefit employers - Wash Post - 01.02.04

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Labor Dept. Plans To End Overtime Controversy in March

Changes Will Affect Who Gets Time-and-a-Half Pay

By Kirstin Downey

Washington Post Staff Writer

Friday, January 2, 2004; Page D10

The Labor Department plans to issue a controversial final rule changing the

Fair Labor Standards Act's overtime provisions by the end of March,

according to a regulatory plan published by the agency last week in the

Federal Register. The rule, which would redefine who must receive overtime

pay, has drawn opposition in the House and Senate by many Democrats and some

Republicans.

" We've said all along we hoped to have a final rule completed by the first

quarter of 2003, and that's still our plan, " said A. Lipnic,

assistant secretary of labor for employment standards. She hinted that the

rules may be modified somewhat to reflect concerns raised by critics but

would not be more specific.

" We're certainly not deaf to Congress and to the debate in Congress and what

members of Congress are hearing from their constituents, " Lipnic said.

She said that the 1938 law needs to be revised and updated because the

economy today is different from when the law was enacted and that confusion

over who should qualify for overtime has led to lawsuits. Changes in the

overtime rules eventually could affect millions of workers nationwide. About

11 million workers received overtime pay in 2002. The administration has

proposed changes that would end mandatory overtime pay for many who now

qualify but would expand overtime coverage to other workers.

Sen. Arlen Specter (R-Pa.), chairman of the Senate Appropriations

subcommittee on labor, health and human services, and education, said he

intends to call a hearing on the issue on Jan. 20, the day the Senate comes

back into session. He said he wants a full airing of the debate, including

testimony by employers, workers, Labor Department officials and economists,

to bring " some clarity " to the proposal.

" I believe we need a revision of the regulations, but this is a bad time to

be cutting back on overtime when so many workers are relying on overtime for

their sustenance, " Specter said. He said he wonders whether it is wise to

cut workers' discretionary spending now, " given the fragility of the

economy. "

Specter said his efforts to discuss the issue with Bush administration

officials had been fruitless. " I've been in touch with the White House, but

so far, there's no give, " he said.

" It's really a pitched battle over a little time span, " Specter said.

" That's what's happening in this legislative process. "

Labor advocates have vowed to keep fighting the proposed changes, either

through legislation or litigation.

" Nothing is off the table as far as we're concerned, " said Owens,

the AFL-CIO's public policy director.

The Bush administration announced its plan to rewrite the Fair Labor

Standards Act in March. In the fall, both the House and Senate voted to

quash the department's proposal, which critics say could result in 8 million

American workers losing their right to time-and-a-half pay when they work

more than 40 hours in a single week. Among the new rules is a provision that

would allow employers to redefine workers who hold " a position of

responsibility " as exempt from overtime. Workers earning more than $65,000 a

year could lose overtime pay under the rules.

Proskauer Rose LLP, a law firm that represents employers, has told its

clients that all the changes would be beneficial to employers.

The Labor Department says 1.3 million low-wage workers could become newly

eligible for overtime pay because the rules would update wage levels last

reviewed in 1975. Under the current rules, workers who earned less than

$8,060 a year are automatically eligible for overtime. The new rule would

raise the cap to $22,100. The Labor Department says 644,000 workers could

lose their overtime pay because of how their jobs are defined.

Sen. Tom Harkin (D-Iowa) sought to scuttle the Labor Department's effort by

blocking funding for implementing it, winning votes in the House and Senate,

which took the issue into the appropriations process. Under intense pressure

from the White House and the Republican leadership, which strongly supports

changing the overtime law, the language blocking the funding was stripped

from the omnibus appropriations bill. The bill passed the House in a 242 to

176 vote in early December, paving the way for the Labor Department to

proceed with its plans. The Senate still must vote on the final

appropriations bill.

Tens of thousands of workers wrote the Labor Department to oppose the

revision, and about a quarter of a million have petitioned the White House

to try to stop it. Dozens of business trade groups support the changes and

have lobbied hard for them. Among the groups urging the Labor Department to

make the changes are the National Retail Federation, the U.S. Chamber of

Commerce, the National Association of Manufacturers, the National Restaurant

Association and the Society for Human Resource Management.

Lipnic said that criticism of the changes has been stirred by

" misinformation " but that she believes the debate also " struck a chord " with

Americans who feel overworked. " People in the workforce today are asking,

'What is the balance between my work life and my home life?' and this

touches on that, " she said.

Some Democrats serving on the House subcommittee on labor, health and human

services, and education, including Nita M. Lowey of New York, Steny H. Hoyer

of land and R. Obey of Wisconsin, said they were threatened with

the loss of funding for projects for their constituents if they didn't vote

as the Republican leadership and Bush administration wanted. All voted

against the final bill.

" The federal government should be looking to do more, not less -- not asking

people to work more, and less predictable, hours for less money, " Lowey

said.

Obey said he was forced to weigh the belief that the rule would " stiff

workers on overtime " against his district's needs. " Members are being told

if you stand up for what you see as the public interest, then the penalty is

that your constituents will be screwed, " Obey said.

Rep. Ralph Regula (R-Ohio), who chairs the committee, said in a letter to

Obey in late October that he would not provide funds for projects in the

districts of members of either party who voted against the bill, which he

defended as " fair and balanced. " He said that he had to make " priority

choices within available funds to secure at least 218 votes " and that the

tactic had been used by " both Democrats and Republicans throughout the

history of the institution. " A copy of the letter was obtained from Regula's

staff.

" I am certainly not trying to intimidate members; I am simply trying to do

the best I can within the funding available, " Regula wrote.