DoL Releases FLSA Changes

“Today workers win,” Chao said in announcing the first changes to FLSA in 54 years which will “modernize and clarify overtime regulations,” Chao said at a news conference.   The changes came after much deliberation and the review of more than 75,000 public comments on draft regulations proposed in March 2003.  

>The final rules, which updates the “white-collar exemption regulations” to section 541of FLSA, are scheduled to go into effect at the end of the summer.  

>Speaking to concerns some groups have raised about the possibility of some workers losing their overtime eligibility, Chao said 1.3 million workers would gain the right to overtime protections under the new rules and 5.4 million with “ambiguous” overtime rights can now be certain of overtime.   Overall the only potential for a loss of overtime protection under the new rules is for workers making over $100,000 a year, which Chao estimates to be 106,000 workers currently receiving overtime protections.

“The final rules expand the number of workers eligible for overtime by nearly tripling the salary threshold,” Chao said in detailing the changes.   Under the final regulations unveiled at the news conference, workers making less than $455/week ($23,660/year) will be guaranteed overtime protections regardless of job duties.   This is a boost from the initial threshold levels that were being circulated of $425/week (about $22,100/year) and a significant boost to the old rules that only provided overtime protections to workers making less than $155/week ( about $8,000/year).

The new regulations also provide guarantees to certain classifications of workers that previously were not guaranteed overtime protections.   As the rules were originally written, a blue collar worker making more than $8,000 per year could have been exempt from overtime protections if their employer labeled them an “assistant manager.”   In fact, this type of incorrect classification led to a flood of lawsuits, which proliferated to the point that Chao said, “overtime complaints now comprise more federal class action lawsuits in the workplace than even discrimination suits.”

Overall, the DoL’s final rule protects the overtime rights of blue-collar workers, union workers, nurses, veterans, firefighters, policemen and similar public safety workers, and responds to concerns raised with earlier proposed regulations during the comment period by clarifying that the overtime rights of these workers are not affected under the final rule. 

“I’m pleased that the Department has listened to public comments and taken into account those concerns in updating its final regulation,” said Education & the Workforce Committee Chairman John Boehner (R-Ohio), in announcing a U.S. House of Representatives hearing about the impact of the rules changes on April 28.

>Echoing these sentiments was Workforce Protections Subcommittee Chairman Charlie Norwood (R-Georgia).   “I am pleased that the Department’s proposal will provide additional protections to low-income workers and ensure that they are entitled to overtime pay, and I look forward to hearing more about the Department’s new proposal at our upcoming Committee hearing,” Norwood said in the release.

More information is available on the final rules at a Web site set up by the Labor Department at  www.dol.gov/fairpay .   This site includes a more detailed explanation of all the changes in addition to fact sheet for employers to use to determine overtime exemption for executive, administrative, professional, computer and outside sales employees, which have long been a rather tenuous classification process for employers.