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The Bush administration sharply scaled back its plan to revise overtime regulations on Tuesday, saying its goal was to increase protections and make more white-collar workers eligible, not take away their extra pay. “Workers will clearly know their rights and employers will clearly know their responsibilities,” said Labor Secretary Elaine Chao, briefing reporters on the plan. The revisions, which do not need congressional approval, will take effect in 120 days. But a leading Democratic critic said the Bush administration “simply is not trustworthy” on the issue. “It’s possible that the administration has had an election-year conversion on overtime but I hope you’ll pardon me if I remain skeptical,” said Sen. Tom Harkin, D-Iowa, who led the opposition to an earlier version of proposed regulations issued a year ago. Chao said the regulations would allow more white-collar workers and low-wage earners to remain eligible for overtime than in a draft proposal issued 13 months ago. The election-year revisions would permit those earning up to $100,000 a year to continue collecting premium pay if they log more than 40 hours a week. The initial proposal, which Chao issued in March of 2003, marked the first comprehensive revision of the overtime standard since 1949. The guidelines were drawn up at the urging of businesses and employer groups, who said that out-of-date standards were creating confusion in the modern workplace about overtime eligibility. The result, they said, was a wave of lawsuits by workers demanding overtime eligibility. The plan immediately drew ferocious criticism from organized labor, Democrats and some Republicans. Congressional efforts to block implementation of the regulations were abandoned in the face of a veto threat. Democratic presidential candidate Sen. John Kerry said in a statement that the changes “strike a severe blow to what little economic security working families have left as a result of Bush’s failed policies.” “Overtime pay makes up a significant part of workers income,” the Kerry statement said. “To deny this long-established right to workers is an outrage. Denying it to millions of American working families during this jobs crisis demonstrates once again the Bush administration’s disregard for the struggles everyday Americans are facing.” The changes that Chao announced come at a time when jobs and pocketbook issues are among the top concerns for voters. Bush has improved his standing in polls on domestic issues, but questions linger about the strength of the labor market and his plan to create jobs. In his remarks on the Senate floor, Harkin said he would defer a final judgment until he sees the fine print of the proposals. At the same time, he said that since the passage of the Fair Labor and Standards Act decades ago, the 40-hour work week and overtime “have been sacrosanct, respected by presidents of both parties. Until now.” Rep. John Boehner, R-Ohio, chairman of the House Education and Workforce Committee, will invite Chao to testify on the issue next week. “I’m pleased that the department has listened to public comments and taken into account those concerns in updating its final regulation,” Boehner said. Under the new rules, Chao said up to 107,000 high-paid, white-collar workers could lose their overtime protection. But 6.7 million workers, many of whom may already earn overtime, would be guaranteed eligibility without ambiguity or questions. By contrast, under Chao’s initial proposal, the Labor Department said 644,000 white-collar workers could have lost protection, and 1.3 million could gain it. Democrats challenged her initial estimates of who could potentially lose eligibility, citing their own analysis of up to 8 million workers. The regulations will not apply to workers covered by labor contracts, although union officials said they feared the changes would strengthen the hand of companies in future bargaining. “The fact that President Bush is slashing overtime pay for even a single worker is outrageous,” AFL-CIO spokeswoman Lane Windham said. The revisions, made after the Labor Department received more than 75,000 comments, would deny overtime pay to white-collar workers who earn more than $100,000 annually and perform some professional, administrative or executive duties, the department said. The initial plan put the salary ceiling at $65,000 annually. The changes also would guarantee premium pay to about 1.3 million white-collar workers earning less than $23,660 a year at a cost to employers of $375 million annually, the department said. The salary tests in the regulations will not be adjusted for inflation. The new salary floor is up slightly from the $22,100 initially proposed. However, the department in its plan last year suggested ways employers could avoid paying the extra money, including cutting those workers’ hourly wages and adding the overtime to equal the original salary, or raising salaries to the new threshold, making them ineligible. Changes to the criteria used to classify workers as professional, administrative or executive and exempt from overtime pay would cause “very few, if any” workers to become ineligible, Chao said. The regulations could save employers $250 million to $500 million annually in penalties or damages from those lawsuits, department officials said. One-time implementation costs are estimated at about $70 million. Copyright 2004 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

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