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Senate Rebuffs Bush, Blocks New Rules on Overtime Pay

By Helen Dewar
Washington Post Staff Writer
Wednesday, May 5, 2004; Page A04

The Republican-controlled Senate voted yesterday to block new Labor Department rules that critics said would deny overtime pay to millions of white-collar workers, handing an embarrassing rebuff to the Bush administration on a politically sensitive jobs issue.

The Senate voted 52 to 47 to scrap the new rules despite recent changes to address earlier criticism, an intense lobbying campaign by Labor Secretary Elaine L. Chao and a last-ditch GOP effort to avert defeat by proposing a long list of jobs for which overtime pay could not be eliminated.

Although the GOP's concessions were approved unanimously, they did not satisfy five moderate Republicans who broke ranks to vote with nearly all Democrats in favor of keeping the administration from cutting anyone's overtime pay.

"This was a great victory for American workers and families" and sent a "clear message to the administration" to drop its efforts to rewrite the nation's overtime pay rules, said Sen. Tom Harkin (D-Iowa), who led the fight against the new regulations.

The issue has enormous resonance in an election year for workers in a vast array of jobs, including nurses, oil rig workers, insurance claim adjusters and restaurant managers. According to Democrats, they could lose overtime pay under the new administration rules.

But the fate of Harkin's proposal was unclear. It was approved as an amendment to a corporate tax bill that faces continuing obstacles in the Senate. The House voted in favor of blocking the new regulations last year but has not acted on the subject this year. Harkin said he believed opposition to changing overtime rules has increased since the last House vote and expressed optimism that the House will approve his proposal.

The dispute over overtime pay began last year when the Labor Department proposed the first comprehensive updating of the rules in 50 years, including broadening coverage for low-paid workers but cutting back on eligibility for those who are better paid -- as many as 8 million, according to Democrats.

In response, the Senate voted to block the plan and the House voted to go along, although Republican negotiators later bowed to veto threats from the White House and agreed to accept the Labor Department plan. Democrats angrily vowed to continue fighting it.

Under pressure from critics, the department rewrote its proposal last month, substantially reducing the number of workers who might lose their overtime pay under a final rule that is due to take effect in late August.

Workers could still qualify for overtime if they make as much as $100,000 a year, instead of $65,000, as initially proposed. Police, firefighters and other first responders were also protected, the department said. Eligibility for low-income workers was also expanded.

With these and other changes, the department said "few if any" workers making less than $100,000 would lose their eligibility for overtime pay and only about 100,000 workers making more than $100,000 would become ineligible.

But Democrats countered that the department's assessment was faulty and that as many as 4 million workers might lose overtime pay under the department's new proposal, in part because of language used to define how work is classified.

The Democrats' proposal would, in effect, leave overtime rules as they are, although it would allow the provisions expanding eligibility for low-income workers to take effect.

"We have progressed -- if that is the right term -- from a proposal [by the administration] that was profoundly terrible to a final rule that is just plain terrible," Harkin contended during the two-day debate.

Republicans disagreed, describing the department's proposal as fair and necessary to keep overtime rules in line with the nation's changing job structure. But, sensing defeat, they offered an amendment specifying that workers in 55 job categories -- from refinery workers to nurse midwives -- would still qualify for overtime. It was approved 99 to 0.

But, on the final vote, Republicans Ben Nighthorse Campbell (Colo.), Lincoln D. Chafee (R.I.), Lisa Murkowski (Alaska), Olympia J. Snowe (Maine) and Arlen Specter (Pa.) joined all Democrats present except Zell Miller (Ga.) in voting to protect overtime pay.

© 2004 The Washington Post Company