EDITORIAL : THE BILLION-DOLLAR BILL; STATE'S POORLY CONCEIVED OVERTIME PAY PROPOSAL COULD COST BUSINESSES A BUNDLE.

EVER since the beginning of the legislative term in January, Democrats in the statehouse have been proposing legislation aimed at goring laws signed by Republican Govs. George Deukmejian and Pete Wilson.

The latest is Assemblyman Wally Knox's, D-Los Angeles, bid to eviscerate the year-old rules governing scheduling and overtime pay for nonunion employees. The law, which eliminated the provision to pay daily overtime and conformed with federal labor regulations, mandates overtime be paid after the 40th hour of work in a week.

It also allows nonunion, hourly employees to arrange schedules that fit their lifestyles. So workers who prefer four 10-hour days because of child care or education commitments without the employer paying time and a half for the extra two hours each day can do so.

Under the Knox proposal, Assembly Bill 60, employees would lose the ability to create work schedules that fit their needs unless they get permission from fellow workers via an in-house election.

It also would limit makeup time for medical appointments to four hours a week; any time over that would be subject to overtime payment rules. So a worker who takes off six hours can charge two hours of overtime.

If it is enacted, the Knox bill would make California the only state in the nation that does not follow the Fair Labor Standards Act's 40-hour-workweek rules. It was approved on a 6-3 party-line vote in the Assembly Labor and Employment Committee and may be heard by the Assembly Appropriations Committee in late April.

Leading the opposition is the California Chamber of Commerce, which argues the union-backed bill will facilitate organizing of unrepresented employees.

Knox claims the law, enacted in January 1998, was a $1 billion pay cut for the state's 8 million employees affected by it, and his proposal will restore those wages.

And while Knox defends the four-hour ``makeup'' time provision, he cannot justify why employers ought to pay overtime on the two hours if a worker asks for six hours off and makes up all of them.

The Knox bill also contains a troubling feature that allows employees to get a double dipping of overtime pay. They would be paid overtime on a daily basis and on their weekly total. Knox doubts that's the case, but promised to amend the bill if it is.

If you want to comment on AB 60, send letters to Appropriations Chairwoman Carole Migden, D-San Francisco, State Capitol Building, Room 2114, Sacramento, CA 95814.