Unions protest as overtime rules take effect

WASHINGTON -- Hundreds of workers rallied on the steps of the Labor Department yesterday to protest the implementation of new rules they say will cause as many as 6 million Americans to lose their overtime pay. But the Bush administration officials who crafted the complex regulations insisted more workers will actually qualify for extra pay under the plan, which almost triples the salary cap to enable more employees to qualify.

Nurses, daycare workers, and hotel and restaurant employees were among the workers who joined Senator Tom Harkin and AFL-CIO president John Sweeney in calling the law, which redefines the type of worker eligible for overtime, a "cruel blow" to the middle class.

"Overtime rights and the 40-hour work week have been sacrosanct, but the promise has been broken," said Harkin, a Democrat from Iowa.

The new rule is quickly emerging as an issue in the 2004 presidential campaign. Democratic vice presidential nominee John Edwards devoted his weekend radio address to attacking the Bush administration for the change and yesterday campaigned against it while meeting with workers in Wisconsin. Democratic presidential nominee John F. Kerry issued a statement calling the guidelines "only the latest insult to America's middle class."

Labor unions contend the new guidelines give employers greater discretion in deciding who is eligible for overtime by implementing a "duties test" that allows them to deny overtime pay to workers who perform both manual and administrative work, including some fast-food workers. According to the Economic Policy Institute, a labor-oriented research center in Washington, the new exemption for "an employee who leads a team of other employees assigned to major projects for the employer" could affect millions of workers and bring the total number of employees who will lose their overtime eligibility to more than 6 million.

But Bush administration officials deny that the status of such part-time managers is threatened, saying the law specifically protects the rights of "working supervisors" and "low-level managers." They add that the new rule expands the number of workers eligible for overtime by increasing the salary level below which workers automatically qualify for overtime from $8,060 to $23,660 per year. Raising the threshold, they say, will make an additional 1.3 million white-collar workers eligible for overtime.

A total of "6.7 million workers will see their overtime protections strengthened under the new Overtime Security Rule," Labor Secretary Elaine L. Chao said in a statement. "Under the new rules, workers will know their overtime rights, employers will know their responsibilities, and the department can more vigorously enforce these protections."

After an amendment to stop the change passed the Senate, the Labor Department proceeded to enact the law, a revision to the Fair Labor Standards Act of 1938. The act required employers to pay their employees time-and-a-half for work over 40 hours a week, with an exemption for salaried employees in executive, administrative, and professional positions.

While employers and employees attempt to decipher the new regulation, an independent review of the regulation by three high-ranking labor officials from the administrations of Presidents Ronald Reagan, George H. W. Bush, and Bill Clinton came out against it. Widely critical of the provisions of the regulation and its lack of clarity, authors John Fraser, Monica Gallagher, and Gail Coleman said the law threatens workers' rights.

"More classes of workers, and a greater proportion of the workforce overall, will be exempt than we believe the Congress could have originally intended," they wrote. "With the exception of the change in the salary level test, implementation of these new regulations will harm rather than promote and protect the interests of US workers and their families."

At the rally, Harkin, joined by Senator Arlen Specter, Republican of Pennsylvania, promised that Congress would continue its bipartisan fight against the regulation when members return in September.

Jessica E. Vascellaro can be reached at jvascellaro@globe.com