Fate of overtime pay rules unclear

WASHINGTON -- The Senate voted Wednesday to halt the administration's effort to rewrite decades-old rules on overtime pay, risking a veto showdown with President Bush and heeding organized labor's claims that the changes would harm millions of workers at a time of economic uncertainty.

The 54-45 vote marked a rare defeat for business interests in the GOP-controlled Congress and left the fate of the emerging Labor Department regulations unclear. The House backed the new rules this summer, and congressional negotiators will have to resolve the issue.

"The Bush administration proposal is not only anti-worker and anti-family, it is bad economic policy," said Democratic Sen. Tom Harkin of Iowa, who led the assault on the regulations. "It will take money out of the pockets of hardworking Americans and will not create one new job."

Labor Secretary Elaine Chao, in a statement, defended the effort as a bid to "strengthen overtime protections for workers" by extending overtime eligibility to 1.3 million low earners who now lack it. "The regulatory process should move forward to benefit workers," she said.

Democratic opponents said their plan would not interfere with parts of the rules extending overtime protection.

They took aim at sections that would strip other workers of eligibility they have long enjoyed. The precise number was a matter of dispute -- an estimated 800,000 by administration allies, and as high as 8 million by Harkin's estimate.

The regulations became the focus of heavy lobbying in which the AFL-CIO joined the battle against business organizations. In turn, that made the showdown a command performance of sorts for the Senate's four Democratic presidential contenders, all of whom broke off campaigning to vote.

Six Republicans split with the administration on the vote, including three -- Sens. Arlen Specter of Pennsylvania, Ben Nighthorse Campbell of Colorado and Lisa Murkowski of Alaska -- who are on the ballot in 2004.

The other three were Sens. Lincoln Chafee of Rhode Island, Olympia Snowe of Maine and Ted Stevens of Alaska.

The vote came during debate on a $137.6 billion spending bill for health, education and labor programs for the fiscal year beginning on Oct. 1. Final passage of the measure came several hours later, 94-0.

While the administration has a generally favorable view of the measure, it issued a statement saying the president's top advisers would recommend a veto if the overtime rules were blocked in the bill that reaches Bush's desk.

Democrats succeeded in two other attempts during the day to change the bill. On a voice vote, lawmakers agreed to add $1.2 billion in funding for special education programs, a top priority of school districts across the country. Also, the Senate voted 51-44 to reverse Education Department rules that would cut off Pell Grant eligibility for some lower-income students and reduce it for others.

In a time-tested congressional ritual used by both parties, Democrats spent much of the day advocating funding increases for a variety of politically popular programs, eager to put Republicans senators on record in opposition.

Thus, an effort to add $300 million in low-income heating assistance fell on a vote of 49-46, 11 short of the 60 needed. As drafted, the measure includes $2 billion for the program.

AFL-CIO President John Sweeney hailed the overtime vote, saying that current protections "help ensure that workers will mot be forced to work excessive hours, and that they will receive fair pay..."

The head of the National Retail Federation, Tracy Mullin, said that the existing regulations "are vague, confusing and totally outdated. It is extremely difficult for an employer to determine whether a worker should receiver overtime and the result has been an explosion of litigation from disputed decisions."

Republican aides, speaking on condition of anonymity, also said that business concern over lawsuits from overtime disputes were a factor in the push for new regulations.

Congress has not been kind to organized labor in recent years. Legislation in 2001 junked Clinton-era standards designed to curtail repetitive stress injuries in the workplace and labor objected to the worker protection provisions in last year's bill creating the Homeland Security Department.

Federal law generally grants workers overtime pay equal to the rate of time-and-a-half for labor in excess of 40 hours a week. The proposed regulations rewrite technical provisions, some dating to 1949, to define which "white collar" workers would be exempted.

One, for example, says that "creative professional employees" who perform work "requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor" will be exempt from overtime. The current standard requires them to "consistently exercise discretion and judgment" to be denied overtime coverage.

Workers who devote more than one-fifth of their time to activities unrelated to their main job are eligible for overtime coverage under current regulations, a provision that would be dropped.

The proposed rules would not generally change protections for workers covered by union contracts, although some existing labor agreements refer specifically to the federal overtime law. Additionally, labor officials said the proposed changes could prompt businesses to attempt to weaken overtime protections in future contract negotiations.

The proposed rules would make overtime available to an estimated 1.3 million low-income Americans now denied it, by raising the annual pay below which overtime must be paid to $22,100. That figure is currently $8,060, where it was set in 1975.