Senate Knocks Down Overtime Pay Rule

WASHINGTON – Labor Secretary Elaine Chao (search) is standing by her agency's proposed new overtime regulations despite a 52-47 Senate vote that signaled dissatisfaction with the Bush administration's work on the subject and underscored the election-year importance of pocketbook issues.

"We will continue to expose the misinformation campaign against the rules and strengthen overtime rights for workers" when the issue reaches the House, Chao said Tuesday.

Her statement was issued after the Republican-controlled Senate voted to demand that any new rules guarantee continued eligibility for overtime pay (search) to any worker who currently qualifies.

Democrats challenged Chao and other Republicans to continue the fight.

"Every member of the House has to stand for election this year," said Sen. Tom Harkin, D-Iowa, chief architect of the proposal that cleared the Senate.

"The administration just doesn't get it," added Sen. Edward M. Kennedy, D-Mass. "But the Senate got it today and we hope the House will get it as well."

The vote was an unusual setback for the administration in the Republican-controlled Senate, and a victory for organized labor.

"There is simply no reason for the Bush administration to slash a single worker's overtime pay, especially in this economy, when middle income families are already so hard-pressed," AFL-CIO (search) President John Sweeney said in a statement.

Senators tagged two other amendments to the bill designed to help workers laid off because of foreign competition. One would create federal subsidies to help them pay their home mortgages while learning a new trade. The other would offer manufacturers a tax credit to help create new jobs.

Harkin's proposal was supported by 46 of the Senate's 48 Democrats, as well as one independent and five Republicans. Two of them, Sens. Arlen Specter of Pennsylvania and Lisa Murkowski of Alaska, are running difficult re-election campaigns in states where organized labor has a significant presence.

Republicans maneuvered for much of the day to scuttle the proposal. Sen. Judd Gregg, R-N.H., with the acquiescence of the administration, offered a concession that provided for continuing overtime eligibility for police, firefighters, nurses and other workers in a total of 55 job classifications. It passed on a vote of 99-0.

But Democrats branded it as insufficient, saying it omitted protection for another 834 job classifications recognized by the Labor Department.

The regulations take effect in August. Barring a reversal in the administration's position, critics trying to block the rules have many formidable obstacles to overcome.

The Senate's action took the form of an amendment to corporate tax legislation (search) that has been stalled for months and has yet to clear either house of Congress. While the Senate voted last year to block work on the earlier set of regulations, the House sent mixed signals, and the administration threatened to veto any attempt to interfere with Chao's work.

The new regulations would mark the first thorough overhaul of government overtime rules in more than 50 years. Administration officials say they would guarantee overtime rights for all white collar workers earning up to $23,660 and protect or expand current eligibility for those earning up to $100,000.

The department says the rules are meant to clarify confusion that has arisen as the result of changes in the work force over the years, and eliminate the need for workers and employers to go to court to determine eligibility.

Chao recently told a House committee that such lawsuits are on the rise, and that often "workers receive only a few thousand dollars each, while the lawyers may walk away with millions of dollars."

Only 107,000 workers earning more than $100,000 annually would be adversely affected by the proposed rules, the department says.

Chao revised the regulations substantially over a draft issued a year ago after Republican lawmakers complained that police, firefighters and others could lose overtime eligibility.

Democrats and organized labor said that despite the revisions, millions of workers in dozens of occupations, including police sergeants, could lose overtime coverage.

Republican Sens. Ben Nighthorse Campbell of Colorado, Olympia Snowe of Maine and Lincoln Chafee of Rhode Island also voted for the Democratic measure. Sen. Zell Miller of Georgia was the only Democrat opposed.

Sen. John Kerry of Massachusetts, the presumptive Democratic presidential nominee, did not vote. An aide said he supported Harkin's proposal.