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Time running out for overtime

Nina Scheppske works full time as a registered nurse at Franklin Square Hospital in Baltimore County. She is a single parent with a mortgage, a child in college and an ailing mother with piles of medical bills.

Money is tight.

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So about once a month, Scheppske, who is 43, picks up an overtime shift and uses the cash to pay for anything from the cable bill to one of life's little indulgences.

"It's nice to be able to have that income because then I can do things like either go on vacation or make my car payment," Scheppske said.

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Now, Scheppske is worried that she might lose her right to overtime pay. She is not alone in that concern.

The U.S. Labor Department has drafted work rule changes that it says would qualify an estimated 1.3 million low-income workers for overtime pay while making about 640,000 white-collar workers ineligible.

Ineligible workers would be paid only their regular salary, no matter how many hours they put in on the job.

But labor leaders say as many as 8 million workers could lose overtime rights - including nurses such as Scheppske - depending on how the new rules are interpreted.

Last week, the House of Representatives rejected with a 213-210 vote Democrats' efforts to block planned changes to the Fair Labor Standards Act.

That close vote appears to clear the way for the Labor Department to impose its new rules, possibly as early as the first quarter of next year.

Just how the rules will be changed is increasingly important for a number of reasons:

Americans are logging more hours on the job than workers in other developed economies around the world, and many families are relying on overtime pay to make ends meet.

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A decline in traditional manufacturing employment accompanied by growth in service and technology businesses has made many existing job classifications obsolete.

A shrinking number of workers is represented by unions, making the federal job rules more important. Existing union contracts would override changes to overtime regulations.

Labor economists such as Jared Bernstein of the Economic Policy Institute, a liberal Washington think tank, say the proposed rules are dangerous for middle-income workers because businesses can more easily deprive them of overtime by placing them in professional, administrative or executive categories.

For instance, under the proposed rules companies can use work experience to qualify employees for professional status that formerly required a degree.

"What we've identified are 8 million people who potentially could lose their overtime. And for those 8 million, it's no small loss because for lots of these people you're talking about hundreds of dollars per week and thousands of dollars per year," said Bernstein, who co-wrote a paper on the proposal.

Md. nurses worried

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Scheppske and activists with the Maryland Nurses Association say they believe registered nurses are very much in danger of losing their overtime eligibility.

Labor Department representatives say such fears are groundless.

"We have made no proposed changes regarding nurses or dental hygienists," said Tammy McCutchen, administrator of the Labor Department's wage and hour division.

The department is proposing to update the Fair Labor Standards Act to say:

Anyone earning $22,100 a year or less automatically qualifies for overtime. (This number is a large increase from the current threshold of $8,060 year and the biggest since the Fair Labor Standards Act was enacted in 1938.)

Salaried workers earning more than $65,000 a year are exempt from overtime pay if they meet one of several job descriptions, such as performing office and non-manual work.

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Workers earning between $22,100 and $65,000 a year might be exempt from earning overtime pay, depending on the duties they perform.

The Labor Department estimates that raising to $22,100 the minimum under which employers are required to pay overtime will guarantee overtime to 1.3 million workers who are not currently eligible.

It estimates the change could cost employers as much as $895 million.

But Deborah Greenfield, associate general counsel for the AFL-CIO, argues that the Labor Department's proposal that someone earning just over $22,100 a year could be "exempt" from earning overtime pay goes against everything the exemption is about.

"The exemptions are designed to exclude only those employees whose job status is high enough that they no longer need the protections of statutory overtime," she said, noting that the proposed overtime level is less than $4,000 above the poverty level of $18,400 for a family of four.

Compensatory time off

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Throwing more confusion into the overtime debate was a bill introduced in the U.S. House by Rep. Judy Biggert, an Illinois Republican, that would have allowed workers to choose compensatory time off instead of overtime pay.

Finding they did not have the votes to pass it, Republican leaders withdrew the bill the day before it was to be voted on.

Should it be adopted later, the bill could affect such workers as Donna Smits, a single mother and supermarket employee in Wilmington, Del.

Smits, who plans to work overtime when her 15-year-old daughter goes to college, worries that if Biggert's bill passes, workers will be pressured to take comp time instead.

"We have a lot of our employees who absolutely depend on overtime ... not just for splurging reasons, but to pay bills," Smits said.

Rep. Elijah E. Cummings, a Baltimore Democrat, agrees. He said the only way his family could afford a house or vacations when he was growing up was with the help of his father's overtime pay.

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A critic of both the comp time bill and the proposed changes in overtime pay, Cummings believes the two could cancel each other out.

"Don't give me a position where I'm able to qualify for overtime in one hand, and then in the other hand give it in comp time with another piece of legislation," he said.

Still, a number of business groups believe the proposed rule changes would be beneficial.

Rob Green, vice president of federal relations for the National Restaurant Association in Washington, said that if both the employee and employer understand who is eligible for overtime, it will lead to fewer lawsuits.

"We think that the new Department of Labor proposal really helps to both clarify and simplify the existing regulations," Green said. "So it's easier, particularly for a small-business person, to understand which of their employees are eligible for overtime and which are not."

The Employment Policy Foundation, a business-backed research firm in Washington, agrees.

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Ed Potter, president of the foundation, said that even if 8 million workers could become ineligible for overtime with the changes, the majority of hourly workers choose not to work overtime, so only a fraction of that number would be affected.

"If you are a knowledgeable person on these white-collar regulations, you will understand that these regulations don't change a great deal," Potter said. "What they do mainly is to clarify and sharpen what the rules are."


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