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Who’s a white-collar employee and who’s not? The issue has long bedeviled companies, since non�white-collar workers must be paid overtime. Confusing, 50-year-old regulations from the U.S. Department of Labor have made the question a difficult one to answer, and disputes have often ended up in court ["Working On Overtime," December 2002]. In March, however, the department offered potential relief to employers by proposing a substantial revision of its rules. In order to be classified as white-collar, an employee would now have to make a weekly salary of at least $425 (current regulations set two different thresholds, $155 and $250). But more importantly, the department hopes to clarify the “duties tests” that have been the subject of so much litigation. Under the new rules, an employee would be considered an executive (and thus ineligible for overtime) if he has the authority to “hire or fire” other workers, or recommend such action. An employee would qualify as an administrator (also exempt from overtime) if he holds a “position of responsibility,” further defined as performing work either “of substantial importance” or “requiring a high level of skill or training.” The department’s proposals are currently undergoing a 90-day comment period, and could take effect in 2004. If adopted, they will represent a huge victory for employers, a fact acknowledged by Michael Loeb, a San Francisco�based partner with Bingham McCutchen who represents companies in overtime cases. “This is just another [sign] of a much more business-friendly administration, that has heard what its business constituencies want,” Loeb says. He adds that “getting rid of some of the vague standards” will make it more difficult for employees to bring overtime class actions.

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