Tuesday, July 1, 2003

Democrats, unions decry pay proposal

Businesses push for overtime change

By Leigh Strope
The Associated Press

WASHINGTON - Business groups gave their support Monday for a Labor Department proposal to drastically change overtime pay rules, saying the current regulations are confusing and have prompted too many lawsuits.

But Democrats in Congress sent letters to Labor Secretary Elaine Chao asking her to withdraw the plans, and labor unions protested with signs and chants on a sidewalk in front of her department.

Monday was the last day to submit comments about the proposal.

A final rule could be in place this year, and congressional action is not required.

Business groups praised the Labor Department for attempting to update the 1938 Fair Labor Standards Act regulations, which determine through several complex salary and duties tests who must be paid a time-and-a-half hourly rate for working more than 40 hours a week.

Salary levels in the complex wage and hour rules haven't been updated for 28 years. The last revision to job descriptions was 54 years ago.

"American businesses are crying out for clarity," said Katherine Lugar, legislative and political affairs vice president for the National Retail Federation.

Overtime pay lawsuits for the first time surpassed class-action job discrimination suits against employers in 2001, and they continue to grow.

The Labor Department says its proposal could affect as many as 22 million workers.

More than 1 million low-wage workers would newly become eligible for overtime pay, or would receive a salary hike. About 640,000 professional workers would lose their overtime pay.

A union-funded study found that 8 million workers would lose their overtime pay. Opponents say those employees will be required to work longer hours without extra pay if the proposal is adopted.

That's because overtime pay acts as a protection to the 40-hour work week, and employers don't want to pay that price to get more work, they say.

"Our citizens are working longer hours than ever before - longer than any other industrial nation," according to a letter sent to Chao by Sen. Edward M. Kennedy, D-Mass., and signed by 42 Senate Democrats.

"At least one in five employees now has a work week that exceeds 50 hours. Protecting the 40-hour work week is vital to balancing work responsibilities and family needs. It is certainly not family friendly to require employees to work more hours for less pay."

More than 100 House Democrats sent a similar letter to Chao, and union leaders and members demonstrated.

Retailers and restaurants, which hire many low-wage workers, claim they will be the businesses hardest hit by the new regulations.

Implementation costs for the restaurant industry have been estimated at $23 million, said Rob Green, federal relations vice president for the National Restaurant Association.

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