September 10, 2004

U.S. House rejects proposed new overtime pay rules

Author: Jay Lyman

In a surprise move against the White House administration's effort to
overhaul the rules that govern who is and is not eligible for overtime pay,
the U.S. House of Representatives voted Thursday 223-193 to circumvent the rules, which
took effect last month. These rules are particularly germane to IT-related employees, well known for working long hours, often deep into the night and weekends.

The vote on the politicized pay issue was an approval of an amendment
sponsored by Democrat representatives David Obey of Wisconsin and George
Miller of California and would eliminate nearly all provisions of the
overtime rule changes.

The subject of debate over impact, the new rules were intended to clarify
and update existing OT regulations that harken back to the 1940s, according
to the U.S. Department of Labor.

While the DOL projects the new rules will extend or strengthen overtime
benefits to more than 1 million workers, critics such as the Economic Policy Institute charge the
changes will enable employers to stop paying overtime to as many as 8
million workers, including nearly 100,000 computer-industry employees.

EPI Vice President Ross Eisenbrey said in a earlier interview that the
rules changes would make it easier for employees to deem workers ineligible
for overtime based on higher levels of expertise or special knowledge, which
would readily apply to IT.

Eisenbrey and other analysts indicated some datacenter administrators and
lower-level computer technicians were among those that stood to lose
overtime pay with the new rules.

For its part, the Labor Department said the House amendment would "turn
back the clock nearly 70 years on a fundamental worker protection" by
preventing the labor agency from enforcing the new overtime rules.

"The Obey amendment puts the overtime rights of millions of workers in
jeopardy by preventing the Department of Labor from enforcing the new rules
which protect and strengthen these rights," said a statement from DOL
administrator Al Robinson. "Under the Obey amendment, workers who make more
than $23,660 will be left to fend for themselves, having to hire expensive
trial lawyers to defend overtime pay."

Robinson said overtime rules for computer employees were largely
untouched and were actually updated more significantly in "white collar"
employee exemptions from overtime that were stipulated in 1996.

The new overtime rules, which some argue have little impact on IT
employees who are rarely paid by the hour, have nonetheless been met with
calls for unionization of IT workers and concern that the industry is among
those targeted to allow cost and pay cuts from employers.

Industry analysts argued that companies will compensate for any potential
overtime losses, through higher wages and salaries, to avoid losing good
geeks. However, many IT workers who point to profit motive worry that they
will be asked to work even more for the same pay.

Regardless of impact, the new rules may not be implemented in their
current form as the approved House amendment would grandfather old OT
protections and preserve only one component of the new rules that increases
the overtime eligibility mark to $23,660 per year. While President Bush has
indicated he will veto a major spending bill that includes the OT rules
amendment, the Senate has yet to work with the House and vote on the matter.

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