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White House determined to get away with rule changes
The plot to steal overtime pay

By Elizabeth Schulte | May 7, 2004 | Page 2

ADD ANOTHER lie to the Bush administration's growing pile of deceptions. And it's about another war this time, too--the war on workers. For a year, the Bush administration has used misinformation and fuzzy math to campaign for its proposed new regulations that could steal overtime pay from an estimated 8 million workers.

Currently, the Fair Labor Standards Act (FLSA) requires employers to pay time-and-a-half wages to most workers for every hour worked beyond a 40-hour week. On April 23, the Bush administration published new overtime rules in the Federal Register, signaling the beginning of a 120-day "compliance period." That means bosses can begin calculating overtime pay according to the Bush rules as early as August 20.

This month, the Senate is likely to vote on an amendment proposed by Sen. Tom Harkin (D-Iowa) that would block the Bush overtime rules. This, of course, will face fierce opposition from the Bush administration.

On April 28, Labor Secretary Elaine Chao appeared before the House Education and Workforce Committee to oppose Harkin's amendment--and condemn the "campaign of misinformation" spearheaded by unions and other opponents of the new rules. But it's the Bush administration that's lying.

Bush's Department of Labor claimed that its changes to the FLSA would make 1.3 million low-income workers newly eligible for overtime. According to the old rules, which haven't been updated since 1975, white-collar workers had to make less than $155 a week in order to qualify for overtime. The new regulations update this figure to $425 a week.

But other new rules offset this benefit. For instance, many workers whose jobs made them eligible for overtime will now be reclassified. Workers with "double duties"--such as an assistant manager at a fast-food restaurant or department store who flips burgers or rings up customers while overseeing staff--could lose their rights.

Under the new rule, they could lose overtime pay, even if they make as little as $23,660 a year--a wage that qualifies a family for food stamps. In addition, any workers who have extra training--skills obtained while in the armed services, for example--could be considered "professionals" under the new rules and ineligible to overtime. According to the Economic Policy Institute (EPI), the new rules will translate into a benefit for less than 737,000 low-wage workers--a far cry from the 1.3 million claimed by the White House.

Meanwhile, more than 8 million workers would lose overtime protection, according to the EPI. The Department of Labor's estimate is just 644,000.

Employers are already investigating ways to avoid paying overtime under Bush's loophole-packed rules. James Coleman of the law firm Constangy, Brooks & Smith advises bosses to raise their workers' salaries just above the cutoff number.

"An employer would have two choices: raise the salary level or consider converting them to nonexempt status," Coleman told the Wall Street Journal. Any way you slice it, Bush's overtime rules are a gift to big business--and they're chomping at the bit to take advantage of it.

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