USA: overtime pay redux

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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 D01


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 Victoria 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 Christine
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 are 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 Maryland and David 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.