White House attacks overtime pay provisions in Labor-HHS bill

The White House is threatening to veto the fiscal 2004 House Labor-HHS spending bill if it includes provisions scuttling a Bush administration initiative to change federal rules governing overtime pay.

The Labor Department estimates that the rules change, which has drawn the ire of labor unions, would provide overtime benefits to an additional 1.3 million low-wage workers, although many middle-income workers could lose their overtime eligibility.

The veto threat is included in a Statement of Administration Policy that supports passage of the House Labor-HHS appropriations bill. But it stated that presidential advisers would recommend a veto if an amendment is added that prohibits the Labor Department from implementing and enforcing the proposed rulemaking on overtime pay.

Private sector employers have long complained that current rules on overtime pay developed under the Fair Labor Standards Act are outdated, confusing and difficult to administer. Federal agencies and employees have been locked in numerous battles over who is and who is not due overtime under the act.

Among Labor's proposed changes is a plan to rewrite the criteria that employers use to determine if employees fall into administrative, professional and executive categories. If employees fall into those categories, then they aren't eligible for overtime pay. Employees ineligible for overtime pay are called "exempt" employees under the law. Employees who are eligible for overtime pay are called "nonexempt."

The Labor Department's regulations apply to private employers. In 1974, Congress applied the Fair Labor Standards Act to the federal government and put the Office of Personnel Management in charge of overseeing overtime rules for executive branch agencies. OPM's criteria for deciding if an employee is exempt or nonexempt are based on the Labor Department's criteria.

OPM was not involved in the Labor Department's revision efforts, but because its rules are so similar to Labor's, it's possible that OPM will follow Labor's suit. OPM would have to propose its own regulatory changes for federal agencies to be affected.

Veto threats are also leveled in the statement of administration policy against a possible amendment that would prohibit the Labor Department from proceeding with regulations revising reporting and disclosure requirements under the Labor-Management Reporting and Disclosure Act, as well as an amendment that would prohibit faith-based organizations accepting federal funds from "taking into account faith when they make their employment decisions."

On Wednesday, Colleen Kelley, president of the National Treasury Employees Union President which represents 150,000 federal employees, attacked Labor's proposed regulations, saying, "virtually every proposed change tips the scales in favor of management."