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New federal rules revise overtime limits.

The U.S. Department of Labor (IDOL) issued as final regulations governing federal overtime pay requirements under the Fair Labor Standards Act of 1938 (FLSA). The "FairPay" provisions (29 CFR part 541) make it easier for employees to understand their rights to overtime compensation, for employers to know their related legal obligations and for the department to enforce the law. The rules update long-standing salary-based criteria for exemptions from minimum wage and overtime pay safeguards for employees in executive, administrative, professional, outside sales and computer-related positions generally referred to as "white-collar" occupations. By revising the exemption criteria, the new rules expand the number of workers eligible for overtime. Under the old regulations, only workers earning less than $8,060 annually were guaranteed overtime pay; the new rules raise that threshold to $23,660, restoring the level of overtime pay protection originally provided under the FLSA. The FairPay rules also strengthen the overtime pay protection for manual laborers and other "blue-collar" workers, police officers, firefighters, paramedics, emergency-room medical technicians and licensed practical nurses.

The regulations, which should take effect August 23, 2004, clarify and simplify the tests for determining whether the white collar exemption applies to a particular employee, raise the minimum salary requirement for exempt employees and clarify the educational requirements for classifying an employee as an exempt professional. The rules also allow employers to deny overtime to "highly compensated" employees who have minimal exempt responsibilities and earn $100,000 or more annually. The department estimates there may he as many as 107,000 such workers. The final regulations and an online seminar covering key provisions are available at www.dol.gov/esa/regs/compliance/ whd/fairpay/main.htm. (At press time, the Senate had just approved an amendment to the FLSA that would prevent the regulations from taking effect. Yet even if the House of Representatives also passes that measure, the President could veto it, leaving the new rules intact. A two-thirds majority in both the Senate and the House is necessary to override such a veto.)
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Title Annotation:Highlights
Publication:Journal of Accountancy
Date:Jun 1, 2004
Words:338
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