FLSA Overtime Rules Get Revamped

08/20/08

The U.S. Department of Labor (DOL) has strengthened overtime rights for 6.7 million American workers, including 1.3 million salaried white-collar employees who were denied overtime pay under previous rules. Will any of your employees be among those affected?

Regulations governing overtime eligibility under the Fair Labor Standards Act (FLSA) establish new criteria for determining whether employees are exempt from federal overtime requirements. Also known as the FairPay rules, the new regulations aim to clarify who qualifies for overtime pay.

Why the new rules?
The FLSA as it pertains to overtime for “white-collar” workers was long due for an overhaul. Regulations have not been substantially updated for more than 50 years. Vague guidelines over who is classified as exempt (not eligible for overtime) led to confusion between employers and employees, sometimes resulting in class-action litigation over (presumed) unpaid overtime.

Highlights of the new regulations:

Previously, only workers earning less than $8,060 annually were guaranteed overtime (qualified for non-exempt status). Under the new rules, the salary threshold nearly triples: Workers earning $23,660 or less will automatically be entitled to overtime pay.

For employees earning more than $23,660 in annual salary, the new regulations clarify what job responsibilities an employee must perform in order to be exempt from overtime requirements.

The FairPay rules clearly state that emergency medical technicians, ambulance personnel, rescue workers, police officers, firefighters, paramedics, and other “first responders” are now entitled to overtime pay. Licensed practical nurses and other similar health care employees generally must be paid overtime, along with blue-collar workers whose jobs require considerable physical skill and energy.

Implications for employers
Employers will now have to conduct job analyses and evaluate each employee’s actual job duties and wages using the new rules’ criteria. This will help to determine which employees can be paid a salary and which workers need to punch time cards to ensure overtime compliance. The new FairPay rules are expected to take effect August 23rd, 2004.

These final regulations are the result of more than a year of controversy between DOL, Congress, employer advocator and organized labor. DOL estimates that the changes will provide up to $375 million in additional annual earnings.

The importance of compliance

To help you meet new FLSA requirements, G.Neil is offering the new FLSA Compliance Kit, which includes:

Wage & Hour Law Understood
Written by employment attorneys specializing in wage and hour law, this updated resource:

Includes complete coverage of the new FairPay rules with easy-to-understand explanations of the revised “white collar” categories.

Helps you determine exempt vs. non-exempt status.

Addresses all aspects of the Fair Labor Standards Act – from child labor laws to payroll deductions to timekeeping discrepancies.

FairPay Compliance Policy
Comply with the DOL’s new recommendation that all companies implement a written policy explaining the “salary basis” of pay and outlining permissible salary deductions. Provides a defense under new FairPay rules for improper deductions.

Wage & Hour Law Rules for Non-Exempt Employees
Make it easy for your non-exempt employees to understand their obligations to keep proper time records to avoid discrepancies that may lead to disputes.

Wage & Hour Law Rules for Supervisors
Ensure that all your managers and supervisors know the rules of handling timekeeping for hourly (non-exempt) employees.

Payroll/Status Change Notice
Document an employee’s change in status from exempt to non-exempt or vice versa.

For more information on FLSA products, contact a G. Neil HR Specialist at 1-800-999-9111, or visit www.gneil.com.