In his first appearance as chairman of the Senate labor subcommittee, Sen. Don Nickles (R-Okla.) said yesterday that he will work to restrict the power of the federal bureaucracy and to help create an American in which "private initiative" is "the dominant social force."

Nickles, 32, the youngest member of the Senate, delivered his maiden speech in a hearing room filled mostly with business representatives and a few labor leaders. They had come to testify on a proposal to eliminate the daily overtime pay requirement for federal contractors who favor a 10-hour, four-day workweek.

In keeping with his philosophy, Nickles said he also intends to "examine a broad range of [other] important labor issues" that he believes affect national productivity and employment. He said his committee will focus on the Longshorsemen's Act in an effort to "eliminate racketeering and corruption in the national labor movement"; the Davis-Bacon Act, which he believes "has had a deadening economic effect" by requiring payment of prevailing wages on federal construction projects, and the young subminimum wage, which he prefers to call "an opportunity wage" designed to make the young more employable.

Under current law -- the Walsh-Healey Act and the Contract Work Hours and Safety Standards Act -- federal contractors are required to pay time-and-a-half overtime to employes who "work in excess of eight hours in any one day."

Nickles, a Moral Majority candidate who had campaigned against federal regulation and regulatory agencies, made it clear yesterday that he favors stripping the overtime requirement from the acts as part of his general objective to reduce "government's burdensome involvement in society."

"If we truly believe in the free enterprise system, we need to get this kind of legislation," Nickles said, "For the last few decades, the dominant political thought has been to meet each social problem by creating more government, such as the Occupational Safety and Health Administration in 1970 . . . all at the price of individual freedom.

"We must explore ways by which private concerns can once again be given a chance to prosper, free from government restraint. This idea has long been ignored in favor of bureaucratic solutions . . . yet the problems remain.

"In the months ahead, I propose that we consider adopting the idea that private initiative should be developed as the dominant social force in our society," said Nickles, whose family in Ponca City, Okla., owns the Nickles Machine Corp., a manufacturer of large engine parts.

John J. Power, legislative representative for the AFL-CIO, said at the hearing that he believes Nickles "is moving in the wrong direction" on the overtime proposal.

However, Nickles assured his audience that he "fervently" supports "the working men and women of this country . . . especially their opportunity and freedom to enjoy the fruits of their labor."