* Gay rights issue divides Republicans
* Critics call bill a federal intrusion
The Democratic-led U.S. Senate, reflecting a major shift in the past decade in public support for gay rights, passed a bipartisan bill on Thursday to outlaw discrimination against gay workers, but the measure faces an uphill struggle in the Republican-led House of Representatives.
The bill cleared the Senate 64-32, with 10 Republicans joining 52 Democrats and two independents in voting "yes."
The Employment Non-Discrimination Act of 2013 has become the latest battleground in an ideological fight within the Republican Party. An increasing number of Republicans support gay rights, but conservative groups threaten to challenge many of those who support the White House-backed bill.
Critics complain that the legislation represents an warranted federal intrusion in the workplace that would force employers to violate religious beliefs in deciding whom to hire.
Backers say legislation would protect people to be able to love whom they choose without the fear of losing their job.
Unlike a decade ago, when gay rights was a "wedge-issue" used to rally conservative voters, most Americans, including most Republicans, now support gay rights, polls show.
Senate passage of the non-discrimination bill came 19 years after such legislation was first introduced in Congress.
"This is a historic victory and shows that the country is moving forward," said Assistant Senate Democratic Leader Dick Durbin of Illinois.
Said Republican Senator Susan Collins of Maine, "All Americans have the right to pursue the American dream."
But House Speaker John Boehner, the top Republican in Congress, has declared his opposition, expressing fear the measure would trigger lawsuits that would hurt businesses and cost jobs.
Backers of the legislation reject concerns about lawsuits, noting that it has not been a problem for states that have adopted similar laws in recent years.
The Senate bill would ban workplace discrimination based on sexual orientation or gender identity. Existing federal law already prohibits discrimination based on race, religion, gender, national origin, age, and disability.
As of April, 88 percent of Fortune 500 companies already had non-discrimination policies for sexual orientation, and 57 percent had such policies for gender identity, according to the Human Rights Campaign, the largest civil rights organization for gay, lesbian, bisexual and transgender Americans.
At this point, there are no plans to bring the Senate bill up for a House vote, but Republican leaders will face pressure to do so, including from members of their own party.
A number of Republican strategists are convinced that their party must embrace gay rights for its own political good.
"It's largely a generational thing," said one party strategist. "Younger Republicans see no reason to discriminate against gays. They have friends who are gay."
Regardless, this strategist, asking not to be identified by name, said he expects Boehner to stand firm against the bill, reflecting the sentiment of older fellow House conservatives.
"Eventually the bill will pass the House. But not this year," the strategist said.
The Human Rights Campaign is part of a coalition seeking passage. Others include Project Right Side, a gay rights group founded by Ken Mehlman, a former chairman of the Republican Party, and TargetPoint Consulting, a Republican polling firm.
Alex Lundry, TargetPoint's chief data scientist, said over the past 10 years support for gay rights has risen in every demographic group.
"Americans are ready for this to happen," Lundry said.
Fred Sainz, an HRC vice president, said his group helped win over eight senators, Democrats and Republicans, with campaigns in seven states, and now will focus on House members.
"It's our job to make it happen," Sainz said.
HRC President Chad Griffin, on a visit to the Capitol for the Senate vote, tweeted: "Note to Speaker Boehner: Turn on C-Span 2 (the TV station that covers the Senate). This is what democracy looks like."
It is unclear how the battle will unfold in the 435-member House. A total of 193 House members, including five Republicans, have signed onto the legislation. Twenty-five more are needed to reach 218, the simple majority required for passage.
Backers may try to force a vote by signing a petition or by offering the bill as an amendment to must-pass legislation, such as a defense spending bill.