Overtime overhaul still would mean pay cuts for workers

Posted: Thursday, April 22, 2004

WASHINGTON Democrats are challenging the Bush administration's overtime pay overhaul, saying many white-collar workers will lose premium pay despite election-year promises that the effects will be minimal.

The new regulations, which were previewed Tuesday and will take effect in 120 days, specify a number of white-collar jobs that will be exempt from overtime pay eligibility. They include pharmacists, funeral directors, embalmers, journalists, financial services industry workers, insurance claims adjusters and human resource managers. Others are management consultants, executive and administrative assistants, dental hygienists, physician assistants, accountants and chefs.

Even athletic trainers with degrees or specialized training, computer system analysts, programmers and software engineers generally will be exempt.

"The devil is in the details, and we just got the details," said Sen. Tom Harkin, D-Iowa, who led Senate opposition to the earlier version of the proposed regulations.

Labor Department officials say those jobholders are not eligible for overtime anyway, based on case law.

"Few, if any," workers will lose overtime eligibility, Labor Secretary Elaine Chao said.

The regulations will not apply to workers covered by labor contracts. Still, union officials said they feared the changes would strengthen the hand of companies in future bargaining.

Critics say the department is actually deciding those jobs are exempt.

"For most of these jobs, there is some law on both sides," said Mark Wilson, a lawyer for the Communications Workers of America union who specializes in overtime issues. "In Chao said about 107,000 white-collar workers earning $100,000 or more a year could lose their eligibility. That is fewer than in a draft proposal 13 months ago that estimated that 1.5 million to 2.7 million workers "will be more readily identified as exempt."

Also, about 1.3 million lower-wage white-collar workers will be newly eligible for overtime, she said. "Workers will clearly know their rights and employers will clearly know their responsibilities," Chao said.

Republicans embraced the changes as evidence the department heeded critics of its March 2003 proposal and developed a plan that will boost the pay of lower-income workers and protect the eligibility of higher earners.

"After 25 years of trying, the Department of Labor has finally provided understandable rules to govern our wage and hour laws," said Sen. Judd Gregg, R-N.H., chair of the Senate Health, Education, Labor and Pensions Committee.

"The new rules will greatly enhance worker protections and employer compliance, while modernizing these badly outdated regulations for the 21st century workplace," he said.

Business groups sought the changes as relief from suits by workers challenging their overtime eligibility status.

The regulations could save employers $250 million to $500 million annually in penalties or damages from those suits, department officials said. One-time costs to put the rules in place are estimated at about $70 million.

Workers gaining overtime protections include lower-wage retail and restaurant managers. Middle-income workers such as office workers, cooks, inspectors, paralegals, licensed practical nurses and technicians "will have their rights better protected," the department said. Democrats also questioned those claims. The administration "simply is not trustworthy on the issue," Harkin said.

Police officers, firefighters and emergency medical technicians are identified as workers who will not lose overtime protections. Democrats and labor unions had said the initial plan was vague and could cut overtime pay for those "first responders."

Harkin and Sen. Edward Kennedy, D-Mass., said they would continue to try to block portions of the regulation that could take away overtime pay.

Democratic presidential candidate John Kerry said in a statement that the changes "strike a severe blow to what little economic security working families have left as a result of Bush's failed policies."



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