Printer Friendly

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 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.)
COPYRIGHT 2004 American Institute of CPA's
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Highlights
Publication:Journal of Accountancy
Date:Jun 1, 2004
Previous Article:Learn from younger employees.
Next Article:PCAOB establishes advisory group.

Related Articles
Sort it out: missing the mark on employee classification or compensation will cost you.
Time out on overtime.
Develop some data.
Overtime rules don't change for most.
Special overtime rules apply in this case.
Understanding the new overtime laws: apartment firms and independent rental owners are advised to review their position descriptions and compensation...
Schools cope with federal Overtime: regulation changes have increased the number of employees eligible for overtime pay.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters