Revised federal job rules to begin

Overtime changes expand eligibility, supporters say

Complex guidelines debated

Critics contend 6 million lose right to extra pay

August 23, 2004|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Federal law that governs overtime pay will undergo perhaps its biggest overhaul in six decades today -- with advocates saying the change clarifies who is eligible for overtime and critics contending it could nullify added pay for extra hours on the job for 6 million workers.

The new rules, enacted by the Department of Labor, change guidelines companies use to determine which workers are required to receive overtime pay for work beyond 40 hours a week, and which aren't.

The department says the updated rules will mean that 1.3 million workers who are currently not entitled to overtime pay will now be eligible because all workers earning up to $23,660 a year will be covered, up from $8,060 a year. An additional 5.4 million workers whose overtime pay was in question will now have it guaranteed, the department says.

"This Monday ... is an historic day," Deputy Secretary of Labor Steven J. Law said in a conference call with reporters last week. "From that day going forward, millions of Americans will benefit from the Department of Labor's new, stronger overtime protections."

But the interpretation of how the new rules will affect certain workers has been the subject of heated debate since the changes were introduced last year. Labor leaders are expected to protest the changes at a rally outside Department of Labor headquarters in Washington today.

Under the new regulations, all workers earning $23,660 or less are guaranteed overtime pay -- the largest increase in eligibility since the Fair Labor Standards Act was enacted in 1938. In addition, employers would not have to pay overtime to some workers earning $100,000 or more a year, the department said.

Workers who earn $23,660 to $100,000 fall into a controversial area. The department says those workers will gain stronger overtime rights and be better protected under the new regulations. But critics say many of those workers will lose their right to overtime pay because their jobs are being reclassified as exempt from overtime protection.

Workers who are paid by the hour and those currently protected by collective bargaining agreements will not be affected, the department said.

Hourly workers

"If you are paid by the hour, you are someone who is entitled to overtime -- no ifs, ands or buts about it," said Victoria Lipnic, the department's assistant secretary for employment standards.

But opponents argue that nurses, computer workers, chefs, insurance claims adjusters, journalists, funeral directors and salespeople are among workers who could lose overtime rights. The criticism has echoed complaints about middle-class and blue-collar workers falling behind economically that have been major themes in the presidential race.

Maryland Democratic Sen. Barbara A. Mikulski, a staunch opponent of the changes, said she is "appalled that the administration has stripped overtime protection from 6 million workers."

A study by the Economic Policy Institute, a Washington think tank, estimates that at least 6 million workers will lose their right to claim overtime pay. Employees may find themselves working overtime because employers can now have them put in the extra hours without pay, labor leaders contend. Also, at a time when millions of Americans are unemployed or under-employed, regulations that allow employers to require more work for the same pay are likely to discourage companies from hiring -- as well as discourage family time for those who are working, they say.

"It's inevitable that people are going to be working longer hours at less pay," said Ross Eisenbrey, vice president and policy director for the Economic Policy Institute.

"The effects can come in two ways, both very unfortunate for workers and their families," said Bill Samuel, legislative director for the AFL-CIO. "This is the most anti-family-friendly proposal to come out of this administration."

Even on the eve of the rule changes, the question of who might lose overtime pay is still being debated. Some say employers might decide to continue to pay overtime to workers, even though they are no longer required to do so by law. Others say loopholes and confusion leave room for employers to halt overtime pay for millions of workers. While some say it could be months before workers feel the effects of the new regulations in their paychecks, others say the changes might be felt immediately.

"I just think it's atrocious," said Sherry Strother, a registered nurse in Prince George's County. "Now, they want to hit one of the most important professional groups that you can have standing by your bedside, the nurses, in the worst places, their pocketbooks." She fears the rule changes will deter workers from joining the nursing profession, already pressed by a labor shortage.

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