Think Tank Says FLSA Changes Will Impact 6 Million

July 14, 2004 ( - A study by the Economic Policy Institute says the Department of Labor's (DoL) changes to the Fair Labor Standards Act (FLSA) will remove six million workers from overtime eligibilities.

The Institute’s report estimates that among those who would lose overtime protection were nearly 2 million administrative workers who can be classified as “team leaders” and 920,000 workers who can be reclassified as a “learned professional” even though they do not have college degrees.

Additionally, the report points to the possible reclassification of 1.4 million workers to “executives,” thus making them ineligible for overtime pay. Other estimations of positions that would lose overtime eligibility contained in the report include 130,000 chefs and cooks, 160,000 financial service workers and 117,000 teachers and computer programmers. The report said the rules change’s impact was likely to be significant because “more classes of workers and a greater proportion of the work force overall will be exempt than we believe the Congress could have originally intended.”

The Economic Policy Institute has raised concerns before about certain groups losing overtime eligibility, issuing an earlier report, which used Labor Department and General Accounting Office (GAO) data about worker pay and qualifications, saying the total effect of the three changes is to exclude at least 8.025 million workers from overtime. Speaking to those concerns when the FLSA amendments were unveiled in April, Secretary of Labor Elaine 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 final rules are scheduled totake effect August 23.