New overtime rules add low-income workers

Bush changes would mean loss of extra pay for 8 million others, critics say

April 21, 2004|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

The Bush administration introduced yesterday changes in the rules that govern who is eligible for overtime, including the biggest increase for workers toward the bottom of the salary scale since the creation of the Fair Labor Standards Act in 1938. But critics say the revisions will hurt other workers and create a potent political issue.

The administration scaled back its initial proposal, which raised concerns about stripping many workers of overtime rights. Under the new rules introduced by the Department of Labor, workers earning $23,660 or less would be guaranteed overtime and those earning more than $100,000 would be exempt from it.

The workers in between would be eligible for overtime depending on their job duties. The regulations also guarantee continued overtime protection for firefighters, police officers, paramedics and other "first responders."

"Today, workers win. The department's new rules guarantee and strengthen overtime rights for more American workers than ever before," said Labor Secretary Elaine L. Chao.

The issue has become a hot political issue. The Senate voted last year to block the original changes. The Labor Department has argued that the overtime changes would clarify outmoded rules and qualify an additional 1.3 million low-income workers for overtime pay. Labor leaders say the changes would cost 8 million workers their overtime pay.

Neither side backed down from its position when the revised regulations were introduced yesterday.

"The Bush administration staunchly opposed legislation which would preserve overtime pay for all workers and instead pressed forward with eliminating overtime pay for a huge swath of middle-class workers, many who make as little as $23,600 a year," AFL-CIO President John J. Sweeney said in a statement yesterday.

"The Bush overtime changes will take money directly out of the pockets of workers and put it into the hands of the President's corporate campaign contributors. This has to be one of the biggest pay cuts in American history - special delivery to American workers straight from the White House."

Sen. John Kerry, President Bush's likely Democratic opponent in the presidential race, called the overtime changes a "severe blow to what little economic security working families have left as a result of Bush's failed policies." "Overtime pay makes up a significant part of workers' income," Kerry said. "To deny this long-established right to workers is an outrage. Denying it to millions of American working families during this jobs crisis demonstrates once again the Bush administration's disregard for the struggles every day Americans are facing."

Business groups said the new rules would eliminate confusion and put a stop to costly overtime lawsuits.

The National Retail Federation called the regulations a victory for employers.

"The problem that employers have had is that the old overtime rules were vague, outdated and confusing," said Katherine Lugar, vice president for legislative and political affairs for the federation. "The lack of clarity has made it difficult to know that you're making the correct decision about who gets overtime and who doesn't. That created a gold mine for trial lawyers trolling for clients they could convince to sue their bosses. This update should give us the clarity to know for certain who should get overtime and put an end to that explosion of lawsuits."

The changes in the Fair Labor Standards Act are to go into effect in late August.

The Labor Department said the new rules would secure overtime protection for 6.7 million salaried workers, including 1.3 million white-collar workers. As a result of the rules, workers are expected to earn an additional $375 million each year, the department said.

"Clearly, the Labor Department has done a lot of things to respond to issues that were raised," said Edward E. Potter, president of the Employment Policy Foundation, a business-backed research firm in Washington.

Under the changes announced yesterday, blue-collar workers and first-responders, such as police officers, firefighters, paramedics, emergency medical technicians and licensed practical nurses, are guaranteed overtime protection.

Workers earning $23,660 or less are guaranteed overtime. The initial proposal set the limit at $22,100 a year, and the current threshold is $8,060 a year. It is the biggest increase since the Fair Labor Standards Act was enacted in 1938.

The Labor Department original proposed that salaried workers earning more than $65,000 a year be exempt from overtime pay if they met one of several job descriptions, such as performing office and non-manual work. Now, only workers earning $100,000 or more would be automatically exempt from overtime, the department said.

Workers who earn $23,660 to $100,000 would gain stronger overtime rights and be better protected under the new regulations, the Labor Department said.

The AFL-CIO and other critics argue that the changes are not as protective as federal officials contend.

"We will oppose this new regulation," said Rep. George Miller, a California Democrat and a sponsor of an amendment to block the proposed changes. "It is dishonest and damaging to families across the country. If the administration wants to expand overtime pay protection to low-income workers, it should just do that, without taking away overtime pay from hard-working families who need the money and who are earning it."

New rules

Workers earning $23,660 or less are guaranteed overtime.

Workers earning more than $100,000 are exempt from overtime.

Workers with salaries between $23,660 and $100,000 are eligible for overtime depending on their job duties, such as whether they have the authority to hire and fire other employees.

Blue-collar workers and first-responders, such as police officers, firefighters, paramedics and emergency medical technicians, are guaranteed overtime.

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