Employer Overtime Rules Gain Clarity

The U.S. Secretary of Labor Elaine Chao issued proposed regulations addressing the payment of overtime wages back in March 2003. Those regulations were designed to meet the concerns of employers who argued that the half-century-old rules failed to address the modern workplace. This oversight created confusion for workers and employers, generating class action litigation and failing to effectively protect workers' pay rights. That proposal drew sustained sharp criticism from organized labor, Democrats in Congress and some Republicans.

The Secretary issued final overtime regulations on April 20, 2004, claiming that the revised rules address critics' concerns and guarantee overtime rights for more American workers than ever before. Under the final "FairPay" rules, the number of workers eleigible for overtime is expanded, as the salary threshold was nearly tripled. Now all workers making $23,660 a year or less will be entitled to overtime pay. FairPay also guarantees police, firefighters, nurses, and first responders overtime protection. The majority of so-called white-collar workers making up to $100,000 a year would also enjoy overtime protections. While as many as 107,000 workers could lose their overtime protections under FairPay, another 6.7 million workers would ahve their overtime protection strengthened, including 1.3 million white-collar workers who were previously not entitled to overtime pay.

The administration estimates FairPay regulations to provide an additional $375 million a year in earnings to eligible workers. The new FairPay rule will take effect in 120 days, but will not affect workers covered by labor contracts. For further information about the Fair Labor Standards Act, visit the department's Wage & Hour Division Web page at www.dol.gov. If you have questions, contact ANLA's John Meredith at 202/789-2900 or e-mail him at jmeredith@anla.org.

This article was reprinted from ANLA's Update newsletter. For more information about ANLA, visit www.anla.org.