BUSH TO DISMANTLE "ANTIQUATED" OVERTIME PAY

By Leigh Strope

AP Labor Writer

Saturday, February 1, 2003; 4:41 AM

WASHINGTON –– A Bush administration overhaul of decades-old labor regulations could force many Americans to work longer hours without overtime pay.

The administration argues that the pillars of American labor law, which established the 40-hour work week, a minimum wage and overtime pay, are antiquated.

The changes, Labor Department officials say, would make more lower-income workers eligible for overtime.

But labor unions fear changes would severely restrict who is legally required to be paid for overtime work.

"Nothing prohibits employers from requiring as many hours as they want," said Chris Owens, public policy director for the AFL-CIO. "The overtime pay requirement is the only thing that acts as a brake on excessive work hours."

It is just one of several changes the administration is pursuing to workplace regulations and programs, including the Family Medical Leave Act, job training programs and unemployment insurance.

The overtime changes are confined to a section of the 1938 Fair Labor Standards Act that defines blue-collar and white-collar workers and determines who must be paid an hourly rate of time-and-a-half for working beyond 40 hours a week. About 80 million workers now are covered by the overtime rules.

Under current regulations, employees are only exempted from the overtime rules if they meet several criteria, including salary, management and other administrative responsibilities and whether jobs require advanced "intellectual" skills and training.

Under the salary test, last updated in 1975, workers earning more than ,060 a year are exempt from overtime if they meet the other criteria as well. The administration wants to raise this amount.

Low-wage workers are being hurt under the current overtime pay regulations, said Tammy McCutchen, administrator of the Labor Department's wage and hour division. She said a minimum-wage worker logging 40 hours a week earns more than ,700 a year.

"If this minimum level is raised, more employees automatically will be entitled to overtime, thus providing additional protections to low-wage workers," she said.

At the same time, however, the department is clarifying and simplifying job descriptions and duties tests. That could move many higher paid workers into the exempt category, though McCutchen said she could not quantify the impact.

"If the changes result in moving an employee who previously received overtime into exempt status not entitled to overtime, the law would no longer require the employer to pay overtime," she said.

The proposed labor law changes are troubling, said Rep. George Miller of California, top Democrat on the House Education and Workforce Committee.

"This administration's track record on worker issues ... demonstrates a strong anti-worker bias," Miller said. "I will vigorously oppose any effort by the Bush administration to undo critical overtime pay and family leave protections."

Employer groups such as the Chamber of Commerce complain that under the complex rules involving job duties and salary levels, many highly skilled and well-paid professional workers are required to get overtime pay. A surge in overtime pay litigation aimed at employers also is a concern.

The law "was created to protect those workers who had the least economic leverage," said Randy Johnson, the chamber's labor vice president. "Now it's been distorted to provide overtime to engineers making over ,000 a year."

The Labor Department is expected to issue the new overtime pay rules for public comment by the end of March. Congressional action is not required.

Unions acknowledge that the overtime regulations, known as "white-collar exemptions," are outdated and confusing. They have essentially remained unchanged for 50 years.

"They're so difficult to interpret that they generate more class-action lawsuits in the workplace than antidiscrimination laws," said Labor Secretary Elaine Chao. "We're going to change that by bringing these regulations into conformity with the realities of the 21st century workplace."

Workers filed 79 federal collective-action lawsuits seeking overtime pay in 2001, surpassing for the first time class-action suits against employers for job discrimination, according to the American Bar Association.

Also on the administration's labor agenda is an overhaul of the Labor Department's job training programs, established under the Workforce Investment Act that Congress must renew this year.

In his 2004 budget being released Monday, President Bush proposes to streamline funding into two job training programs instead of having a number of separate initiatives. He also wants billion to fund new re-employment accounts to help workers pay for job-search expenses.

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On the Net:

Overtime exemptions fact sheet: http://www.dol.gov/esa/regs/compliance/whd/whdfs17.htm

Overtime requirements fact sheet: http://www.dol.gov/esa/regs/compliance/whd/whdfs23.htm