Overtime plan still under fire

The nation's biggest labor federation vowed yesterday to continue efforts to block the Bush administration's new overtime regulations, saying that it would not rule out suing the government if the rules cause large numbers of workers to lose overtime pay.

"We hold open all of our options, one of which would be litigation," said Christine Owens, public policy director at the AFL-CIO. "If we determine after looking at the regulations that it makes sense, we will file a lawsuit."

Her comments came several hours after the Labor Department, reacting to mounting political and public pressure over its original proposal to revamp the nation's overtime rules, released a watered-down revision that would raise the salary level below which workers would automatically qualify for overtime from $155 a week to $455, or $23,660 a year.

The government also proposed raising the overtime-eligibility cap for salaried employees to $100,000 per year, from $65,000 in its original proposal. About 107,000 salaried employees will probably lose overtime pay under the final rules. The revisions, the first major rules changes under the Fair Labor Standards Act in 28 years, are scheduled to go into effect in 120 days. Federal law requires overtime pay after 40 hours per week.

Last year, when the government first proposed revising the rules, it said 1.3 million new workers would receive overtime pay. However, labor leaders argued that 8 million workers would lose the extra pay.

Yesterday, government officials said the revisions would give more workers access to overtime pay, noting that all hourly workers and public safety employees would be guaranteed overtime. This means that firefighters, emergency medical technicians, licensed practical nurses, and police officers will continue to receive overtime, said Tammy McCutchen, administrator of the Labor Department's Wage and Hour Division.

She said the Labor Department was unfairly accused of attempting to strip workers of overtime. "This final rule will put that issue to rest," she said. "We have been responsive to all the major comments: If you are paid by the hour, no matter your duties, you will get overtime."

But critics, whose concerns have garnered headlines in a presidential campaign year, argued that many middle-class Americans who earn between $23,660 and $100,000 per year could still lose overtime. For example, Owens said, the new regulations would not take inflation or salary increases into account. She said that could cause other workers to lose overtime every year.

"They say nothing about increasing the salary threshold to take into account the increase in the cost of living," Owens said. "There is just one static salary threshold. That means that, every year, as wages rise, you will have fewer people who earn below that threshold of $23,660 and fewer people who will be automatically guaranteed overtime protection."

If adjusted for inflation, the lowest salary threshold would be $31,720, Senator Edward M. Kennedy, Democrat of Massachusetts, said in a written statement.

"If the White House genuinely wanted to protect low-wage workers, the overtime rule would simply increase the minimum salary threshold at least to inflation," he said. Instead, he said, the rules expanded tests that exempt some workers from overtime and created a new test to determine whether certain highly compensated white collar professionals should be exempt from overtime.

Kennedy said he and Senator Tom Harkin, an Iowa Democrat, plan to reintroduce an amendment proposed by Harkin that would prevent workers who currently receive overtime from losing it.

Diane E. Lewis can be reached at dlewis@globe.com.