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Proposed revisions to overtime rules drawing intense concern

http://www.jewishworldreview.com | (KRT) In proceedings almost too technical to follow but too important to skip, the Bush administration wants to modernize the federal rules that determine which of 138 million American workers get overtime pay.

There's little disagreement that the rules - written for the most part in the 1940s - are out of date. But the Labor Department's proposed revisions have drawn more than 70,000 public comments from employers, unions and others who disagree sharply on which rules need to be changed and how.

Labor Department officials, led by Wage and Hour Administrator Tammy McCutchen, who did the drafting, contend the overtime revisions are an administrative matter, not requiring a public hearing. Pro-labor congressional Democrats, however, say McCutchen's changes, likely to take effect in 2004, are so fundamental that Congress should hold hearings and vote on them.

"The whole idea of having the Labor Department do it by regulation is that Congress and Bush can avoid accountability," said Nicholas Clark, an attorney for the United Food and Commercial Workers Union.

Procedural issues aside, it's unclear who'd gain and lose from the revisions. The administration argues that 1.3 million low-income workers in fast-food restaurants, retail stores and other establishments will become eligible for time-and-a-half after 40 hours, thanks to its changes. But the labor-affiliated Economic Policy Institute, a Washington research center, cautions that more than 8 million other workers, including cooks, health workers, journalists and supervisors in restaurants and retail stores, would lose overtime pay unless it's stipulated in union contracts.

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All this is speculative, because the revisions, which simplify and edit down the existing 31,000-word regulations by some 18,000 words, will have to be hammered out in court to determine what they really mean. The result, in the meantime, is a raw climate of uncertainty and mistrust in U.S. labor circles.

At issue is how the overtime provisions of the Fair Labor Standards Act of 1938 - created to enforce the concept of a 40-hour workweek and encourage employers to hire more workers - should be interpreted. The law basically says workers get overtime and high-level executives, administrators and professionals don't.

The rules in question define who belongs in which category. The existing rules, with references to straw bosses, keypunch operators and legmen, are a bit archaic. Interpreting them has come to involve class-action suits and an army of lawyers. The logic behind the interpretations is often strange.

Take the situation of Janice Murphy, an equipment specialist at the Navy's Ship Systems Engineering Station in Philadelphia. Many of her colleagues have degrees in mechanical and electrical engineering, but she made the grade via two years of college night classes and almost 29 years of experience. "We basically do the same things," she said.

Under the existing rules, she gets time-and-a-half after 40 hours while her degreed co-workers - considered "learned professionals" - don't because of their educational backgrounds. If the changes go through, Murphy probably would lose her overtime, because they would give on-the-job experience equal weight with a formal degree.

More generally, the revisions come down to three main changes:

_All employees who make less than $22,100 annually - as opposed to $8,060 now - automatically would get overtime, a move the Labor Department says will benefit many black and Hispanic women in low-wage service jobs.

_A high-earner clause would make it easier for employers to exempt anyone who earns $65,000 or more a year from overtime pay requirements.

_The qualifications for exemption would be altered in ways that could expand who doesn't get overtime. Currently, workers generally must hold advanced or specialized degrees to be considered professionals ineligible for overtime. The new language specifies that a combination of work experience and on-the-job training can qualify workers for exemption as professionals, but doesn't clarify how much training or experience.

The revisions eliminate a requirement that professionals' work be varied and intellectual, not routine. A lab technician who does the same test hour after hour on different samples therefore could be exempt from overtime pay under the new proposals.

The biggest change may be under the administrative category of employees. Under the existing rules, a bookkeeper, for example, must "exercise discretion and independent judgment" to be exempt from the overtime pay requirement. Under the new rule, that bookkeeper must hold "a position of responsibility" to be exempt. This is defined as work of "substantial importance" or work that requires "a high level of skill or training."

McCutchen, Labor's wage and hours administrator, sees value in the simplifying updates. "Having clear rules means it's easier for the DOL to enforce the law," she said in a telephone interview.

At the same time, however, the new language makes rubble of more than 50 years of court rulings on overtime and invites employers to come up with new interpretations.

"They've added new definitions, so people are going to say, `Let's see what a judge says,''' said Ellen Kearns, a lawyer for Epstein Becker & Green in Boston who represents employers in wage and hour cases. "I'm not sure that these new regs are going to stem the tide of litigation."

Unions and labor lawyers tend to see the revisions as a stealthy attempt to expand the ranks of workers who don't get overtime.

"Simplification sounds good, but it's a guise for broadening the scope of who is exempt," said Julia Clark, general counsel for the International Federation of Professional and Technical Engineers.

Pro-labor Democrats are about to weigh in. This week, Rep. George Miller of California, the ranking Democrat on the House Committee on Education and the Workforce, called for hearings on Labor's proposed regulations. With Rep. Peter King, a New York Republican, Miller is sponsoring a bill to block the overtime-rule revisions.

___

These Web sites focus on overtime pay issues:

Department of Labor, www.dol.gov/dol/topic/wages/overtimepay.htm

Department of Labor, www.dol.gov/esa/whd/

AFL-CIO, www.aflcio.org/yourjobeconomy/overtimepay

Economic Policy Institute, www.epinet.org; search for "overtime."

Employment Policy Foundation, www.epf.org/research/newsletters/2003/pb20030521.pdf

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