WASHINGTON — Controversy swelled here Monday over proposed changes to federal overtime laws — a decades-old battle between management and labor — as labor and retail groups lent their voices to the debate.

The Department of Labor said its proposal would add 1.3 million workers to the ranks of some 110 million now eligible for extra pay after working 40 hours. At the same time, the DOL estimates that about 640,000 white-collar professionals paid by the hour could be removed from overtime eligibility. An estimated 10.7 million workers now deemed to have an uncertain pay-rate status would have their status clarified.

The current rules have complex tests for defining overtime-ineligible administrative and executive jobs, and qualifying blue-collar production and clerical positions. Under the new proposal, all workers making $22,100 or under would receive overtime if they work more than 40 hours a week. Workers covered by union contracts and contract workers would be unaffected by the changes.

Currently, the salary level triggering overtime is $8,060 or $13,000, depending on various job descriptions. The salary threshold was last increased in 1975.

Organized labor claims millions of workers will lose their right to overtime pay and cited a study released last week by the Economic Policy Institute, a union-supported think tank, that asserts more than 8 million workers could lose overtime if the proposed changes are enacted.

On the other hand, retail and manufacturing associations said they support the proposed changes to the 54-year-old federal rules governing overtime pay.

“It is not our intention to negatively impact the wages and salaries of workers,” Tammy McCutchen, DOL’s wage and hour administrator, said in a phone interview. “We have tried very hard not to do that and it is part of the comment process to determine whether or not we have done that.”

The agency’s 90-day public comment period ended Monday. “If it turns out that some of the language in the proposals have an impact that we did not intend, we will make changes,” said, McCutchen, stressing, however, that the EPI’s report and many of its calculations are based on misunderstandings of the current law and “mistakes.”

McCutchen said she doesn’t expect the new overtime rules to be implemented until the first quarter of 2004.The AFL-CIO held a demonstration in front of DOL headquarters, where 150 people held signs saying, “Overtime pays our bills,” and, “Cut [Labor Secretary Elaine] Chao , not overtime,” and chanting, “George Bush isn’t fair — all we want is our fair share.”

“We’re in the worst job market this nation has seen in decades,” said Richard Trumka, AFL-CIO secretary treasurer. “Wages are stagnant, health care is getting more expensive and it’s taking people months to find decent work. Yet the Bush administration is throwing out proposals, like this one to cut overtime pay, that are economic poison.”

Meanwhile, Katherine Lugar, vice president of government relations at the National Retail Federation, which supports the proposed overhaul, said at a press conference that some of the NRF’s smaller members in rural areas could be impacted by the higher salary levels allowing overtime, forcing them to create different staffing structures.

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