Compliance September 10, 2003

US Senate Blocks Bush's FLSA Amendment

September 10, 2003 (PLANSPONSOR.com) - If President Bush's amendment to the Fair Labor Standards Act (FLSA) white-collar exemption tests is going to be approved, he is going to have to first make good on his recent veto threat of a Democratic proposal.
Reported by

>This came after the Republican-led US Senate voted 54 to 45 to back a Democratic amendment that would derail a proposed expansion of overtime exemptions for white-collar workers under the Fair Labor Standards Act of 1938.     The Senate vote came on the amendment that would deny any funding for the proposed changes and was attached to a broader $138-billion spending bill for US health, labor and education programs, according to a Reuters report.

>However, the measure is not law yet, and must still be approved by the US House of Representatives, which earlier this year narrowly defeated a similar measure.    Additionally, if the White House makes good on its promises of veto to the Senate-approved measure, then both chambers would have to override the presidential veto with a two-thirds vote.  

Bush Proposal

Bush’s proposed changes would have been the first comprehensive overhaul in more than 50 years of the white-collar exemption tests used to determine whether an employee must be paid overtime or is exempt from the minimum wage and overtime requirements of FLSA. Currently, there are three tests for whether or not an employee is ineligible for overtime:

  • the employee’s level of pay
  • whether or not the employee is a salaried or hourly worker
  • whether or not the employee performs certain job duties.

As the rules stand, any employee making more than $155 a week (about $8,000/year) could be excluded from overtime, if they had a salary and a job description that fell into certain categories.

The proposed regulations would have lifted the cutoff to $425 a week (about $22,100/year), a step that could add about 1.3 million lower-wage workers to the ranks of people eligible for overtime and could go into effect as early as 2004, according to DoL (See   White House Proposes Overtime Rules Overhaul). 

The administration, along with the business community, argued the proposed changes are needed to update antiquated work rules.     However, nay-sayers, a group that includes labor unions, say the changes would unfairly strip workers of overtime protection and allow companies to make them work longer than a 40-hour week without additional compensation (See  Report Claims Eight Million May Lose OT Pay ).

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