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Senate Blocks Proposed Changes to Overtime Rules

The Republican-led chamber approved the Democratic amendment by a 54-45 vote. That amendment seeks to derail the proposed expansion of overtime exemptions for white-collar workers.

The Labor Department’s proposal would also raise the annual pay below which overtime must be paid from $8,060 to $22,100, which the administration says would make 1.3 million more low-income workers eligible for overtime pay. The Democratic amendment that passed Wednesday would not rescind that part of the Labor Department’s planned changes.

Democrats offered the provision blocking the rules change as an amendment to a measure providing $137.6 billion for next fiscal year’s labor, education and health programs.

House-Senate bargainers will spend the next few weeks writing a compromise version of that underlying bill, under pressure from GOP leaders and the White House to omit language derailing the overtime plan.

The White House has said President Bush’s advisors would recommend he veto the entire spending bill if the amendment remains attached.

The proposed changes — which do not affect workers under union contracts — would take effect as soon as early 2004 unless a law is enacted blocking them.

The 1938 Fair Labor Standards Act created the 40-hour work week by guaranteeing overtime pay, at time and a half, for each hour worked over 40. The law allows for the exemption of administrative, professional and executive workers.

According to the Labor Department’s latest figures, 11.6 million workers earned overtime pay in 2000.

Exactly how many workers will be affected by the proposed changes to the Fair Labor Standards Act has been a matter of much debate. The Labor Department estimates no more than 644,000 employees would lose overtime protection. But the liberal Economic Policy Institute puts the figure at more than 8 million.

In addition, the Labor Department contends the changes would affect only white-collar employees and not manual workers or firefighters, police officers or nurses. The AFL-CIO maintains that the proposed changes could strip many of them of overtime protection, too.

Sen. Tom Harkin (D-Iowa), who led the effort to block the proposed rules, said the Department of Labor had acted in a “very heavy-handed manner” in crafting a proposal that would “wipe away the overtime protections” enjoyed by millions.

Linda Chavez-Thompson, executive vice president of the AFL-CIO, said that the Labor Department changes “would be a major step backward for working families who struggled so hard to win the 40-hour workweek, the weekend and other job protections.”

The business community has lobbied in support of the proposal, arguing that the changes would bring the rules up to date and make them easier to interpret, which would cut down lawsuits between workers and employers.

“We’re in a much different economic situation today than we were 50-plus years ago. Our nation’s laws and regulations should reflect our current economy so businesses can be as efficient and productive as possible,” National Federation of Independent Business Senior Vice President Dan Danner said.

The U.S. Chamber of Commerce also supported the proposal and argued that it “will bring greater clarity to the issue of who is an exempt white collar employee and curb some of the unnecessary and extremely costly [Fair Labor Standards Act] litigation.”

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