Archive for Sunday, August 22, 2004

Overtime overhaul to take effect Monday

August 22, 2004


— In an unprecedented overhaul of the nation's overtime pay rules, the Bush administration is delivering to its business allies an election-year plum they've sought for decades.

The new rules take effect Monday after surviving many efforts by Democrats, labor unions and worker advocates to block them in Congress and kill them through public and political pressure. The administration and business groups say the old regulations were out of date and confusing, and were sparking multimillion dollar lawsuits.

The Labor Department says no more than 107,000 workers will lose overtime eligibility from the changes, but about 1.3 million will gain it. The Economic Policy Institute, a liberal Washington think tank, says 6 million will lose, and only a few will get new rights to premium pay for working more than 40 hours a week.

But no one really knows. That makes the issue harder to demonize politically, a benefit -- or a problem -- depending on the side you take.

"I do not see any kind of rush by employers to take away overtime rights," said Bill Schurgin, a labor attorney for the Seyfarth Shaw law firm in Chicago, who represents employers preparing for Monday's change. Critics claim that 6 million workers will lose eligibility is "a red herring."

Regardless, "nobody should get their overtime pay taken away," said Karen Nussbaum, executive director of Working America, an AFL-CIO organization created for workers unable to join unions.

About 115 million workers are covered by the overtime rules in the 1938 Fair Labor Standards Act.

Monday's change is the culmination of decades of lobbying by business groups representing retailers, restaurants, insurance companies, banks and others that have been hammered by workers' overtime lawsuits, many of them successful.

Wal-Mart is facing dozens of worker lawsuits claiming they were cheated out of overtime and worked off the clock. An appeals court upheld a $90 million verdict against Farmers Insurance Exchange, sued for overtime by claims adjusters. Other companies that have made multimillion-dollar payouts include Starbucks, Radio Shack, Rite Aid and Bank of America.

Labor Secretary Elaine Chao told Congress the new rules would help stop "needless litigation" because they were designed to clarify who's entitled to overtime. Critics say the rules will prompt even more lawsuits.

WASHINGTON (ap) -- In blasting new overtime rules that take effect Monday, Democratic vice presidential nominee John Edwards says he can't understand why the Bush administration wants to undermine a system that rewards workers who toil long hours."If you work hard, then you should be rewarded for that effort," Edwards said Saturday in the Democrats' weekly radio address. "It is a time-honored tradition. It is what built this country."Why would anyone support this new rule which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year?"Democrats, labor unions and worker advocates tried unsuccessfully to block the new regulations -- the first overhaul of government overtime rules in more than 50 years.

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