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6 million may still lose OT pay: study
Labor-backed group says new revisions to work rules will still mean lost overtime for millions.
July 14, 2004: 4:22 PM EDT
By Andrew Stein, CNN/Money staff writer

NEW YORK (CNN/Money) - Revised changes to overtime rules proposed by the Bush administration will still fail to protect overtime pay for 6 million workers, according to a new study.

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The Labor Department, however, dismissed the study as a "rehash of misinformation."

The Bush administration issued proposed changes to overtime rules last year, but then revised them in March after criticism from some labor groups.

The original proposal would have stripped overtime protection for 8 million workers, according to the Economic Policy Institute (EPI), which studies issues affecting middle- and lower-income workers and receives funding from some labor groups.

But the revisions would still strip OT pay for about 6 million workers, EPI said in a study released Tuesday.

"The 6 million number may be a little high, but I think the [EPI] analysis is the most complete," said Thomas Kochan, a management professor at MIT's Sloan School of Business.

"Some changes to the overtime rules are needed, but the ones proposed don't reflect the nature of work today."

In its report, the EPI said that its numbers are an estimate and "we have been unable to determine the impact of many of the changes with any precision."


Under current rules, a worker would have to meet three tests to become ineligible for overtime pay: a minimum pay test, an hourly-pay or salary test and a duties test.

The EPI said the revised rules announced in March would affect the duties test the most and "dramatically increase the number of workers who would be classified as 'professional,' 'administrative,' or 'executive' and thus remove millions of additional workers from overtime coverage," the EPI said.

For instance, the group contends that employees who merely recommend, but not carry out, the changes for two employees they supervise will be classified as executives and become exempt from overtime pay.

The Labor Department and supporters of the changes contend the revised regulations will update old rules, cover more workers and reduce the amount of class-action lawsuits.

"These latest 'studies' are a rehash of misinformation the AFL-CIO and its allies put out about the department's final Overtime Security Rule in April -- assertions that were completely discredited in congressional hearings," Labor Department spokesman Ed Frank said in a statement.

"This is a last-ditch effort to restart the misinformation campaign that has failed to cover up the fact that millions of workers will benefit from the Department's strong new overtime guarantees."

The conservative think tank The Heritage Foundation agreed.

The foundation said it estimated that nearly 1.3 million workers earning $155 to $455 a week would become eligible for overtime under the changes.

It said that the only workers who may lose overtime under the new rules are some individuals who earn more than $100,000 a year.

The EPI did say that another 400,000 employees who work overtime will now be paid for it, but added that pay for these workers would not be indexed for inflation, so that it will protect fewer workers over time.

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The OT rule revisions are set to go into effect in August, but some members of Congress have vowed to stop them.

Sen. Tom Harkin, D-Iowa, has introduced an amendment that is attached to a corporate tax bill that will stop any worker from losing overtime rights.

"If the amendment is dropped and the rules go into effect in August, (Harkin) has vowed to find another way to block it in September," a staff member from Harkin's office said Wednesday.

The amendment is largely seen as a stop-gap measure, MIT's Kochan said, "until we have a revision that reflects the way work is done today."  Top of page

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