(Reuters circulated the following story by Thomas Ferraro on August 20.)
WASHINGTON, D.C. — American labor and business are gearing up for a Capitol Hill battle over whether to redefine who in the American work force has the right to overtime pay.
The AFL-CIO, the nation’s biggest labor group, is rallying its members to urge Congress to block a Bush administration proposal that critics say could end such compensation for millions of workers by expanding overtime exemptions.
Amid disagreements over who would be affected, foes say firefighters, police officers, nurses, dental hygienists and truck dispatchers could be among those stripped of overtime.
Backers contend that the revisions are aimed at white-collar employees, largely ones in mid- or high-level jobs. They include sales personnel, managers, financial planners, advanced computer technicians, even rocket scientists.
Opponents say if they fail to block the proposed changes in Congress, they will challenge them in court. Unless stopped, they could take effect early next year and become an issue in the 2004 White House and congressional elections.
A letter drafted by the AFL-CIO for its 13 million members to send to lawmakers reads in part: “This is one of the issues I will use to measure your commitment to working families.”
The U.S. Chamber of Commerce, the nation’s biggest business group with more than 3 million members, is helping take the lead in defense of the proposal. It says the changes are needed to update antiquated federal work rules.
Both sides predict a razor-close close Senate vote, likely early next month, on whether to block implementation of the proposed changes in the 1938 Fair Labor Standards Act.
Yet even if Democratic-led foes prevail in the Senate, they would have to get the House of Representatives to concur. Last month a similar bid there came up two votes short.
Sixty-five years ago, the Fair Labor Standards Act created the 40-hour work week by guaranteeing overtime pay, at time and a half, for each additional hour. Administrative, professional and executive employees were exempted.
Under the U.S. Labor Department’s proposal, more employees could be reclassified as exempt administrators, professionals or executives — provided they meet certain criteria.
WHO IS EXEMPT
For example, it would replace the test that administrators must exercise “discretion and independent judgment” with a requirement that the employees merely hold a “position of responsibility.”
In addition, employees earning more than $65,000 a year could be exempt if they meet one or more of the duties for an executive, administrative or professional employee.
“The notion of going forward with this change is simply counter intuitive” to the sluggish economy, said Christine Owens, director of public policy at the AFL-CIO.
“This change would discourage job creation by allowing companies to make workers work longer hours without additional pay and increase worker insecurity,” Owens said.
But the administration agrees with business that the 1938 law needs to be updated to reflect the modern workplace.
“Things have changed,” said Bruce Josten, executive vice president of the U.S. Chamber of Commerce. “Today you have financial people, management people — some making upward of six figures — who are not exempt under the current rules from overtime. It just doesn’t make sense.”
While the proposed changes would end overtime for many white-collar workers, it would guarantee it for an estimated 1.3 million low-paid white-collar workers who make $425 a week or less when they work more than 40 hours a week. There are no plans in the Senate to try to block this portion of the proposal.
Currently, nearly 80 percent of the nation’s estimated 134 million workers are eligible for overtime. Yet far fewer get it, many because they simply are not asked to work it.
There is plenty of confusion and debate over how many workers — and what type of employees — would be affected by the proposed changes.
The Labor Department estimates that no more than 644,000 employees would lose overtime. But the liberal Economic Policy Institute, in what it calls a limited and initial analysis, puts the figure at more than 8 million.
In addition, the Labor Department contends that the changes would affect only white-collar employees and not manual workers or firefighters, police officers or nurses.
Yet critics, including the National Association of Police Organizations, argue the proposed changes could be interpreted to strip many of them of overtime, too.
The Labor Department says its rule changes would not prevent a company from paying overtime. But foes say without the force of law, many would stop.