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New US rules to cut overtime pay for up to 6 million

As the Bush administration's new overtime rules went into effect yesterday, the Kerry campaign said they would harm millions of American workers.

The Kerry campaign and public interest groups say the regulations will exempt up to 6 million more workers from receiving time-and-a-half pay by redefining which workers qualify when they work more than 40 hours.

The administration claims that no more than 107,000 workers will lose their eligibility, while 1.3 million workers will gain the right to overtime.

But the new rules say that workers earning between US$23,660 and US$100,000 who previously were entitled to overtime pay are ineligible for the extra pay if they can be classified as "professionals, administrators or executives." The rules give examples of numerous jobs that can become exempt from overtime pay, including nurses, chefs, pharmacists, funeral directors and embalmers, claims adjusters and restaurant and other managers.

Critics of the new rules say they are another example of the Bush administration's taking regulatory steps that please businesses, which have lobbied for years to cut overtime rules.

The liberal Economic Policy Institute issued a report concluding that the rules will exempt about 6 million workers from overtime coverage. Among those, the institute said, are 1.4 million low-level supervisors, 130,000 chefs and sous-chefs and 900,000 workers with college degrees who will now be considered professional employees.

Senator John Edwards, the Democratic vice-presidential candidate, assailed the new rules in his party's weekly radio address on Saturday.

"Why would anyone want to take overtime pay away from as many as 6 million Americans at a time when they need that money the most?" Edwards said.

Senator John Kerry, the Democratic presidential nominee, said last month, "The new overtime regulations represent a shameful assault on the paychecks of hard-working Americans."

The administration asserts that the new regulations are needed to replace what it called vague, outmoded rules that have spurred many lawsuits as employers and employees tussle over which workers are exempt. The administration argues that the overtime rules are clearer, will be easier to enforce and will reduce expensive litigation.

"We view this as a step in the right direction for bringing clarity and certainty to this area of the law so there can be greater compliance," said Alfred Robinson, director of the Labor Depart-ment's wage and hour division.

Overtime, which is governed by the Fair Labor Standards Act of 1938, is a complicated area of law. Senior managers do not qualify for overtime pay when they work more than 40 hours, but the more difficult questions involve whether low-level salaried supervisors should be viewed as managers who do not qualify for overtime.
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