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One of the most critical missions of the Department of Labor is to ensure that workers are paid properly. We take this responsibility seriously. Last year, the department’s Wage and Hour Division collected $212.5 million in back wages for 342,358 employees — an 11-year high. But fulfilling our mission requires regulations governing overtime pay that protect workers and that are clear and straightforward, so that workers know their rights and employers know their obligations. As all concede, the department’s old overtime regulations failed to meet these basic requirements. We now have taken the important step of updating these regulations to enhance the right of employees to earn overtime pay. JOBS FROM THE HISTORY CHANNEL Section 13(a)(1) of the Fair Labor Standards Act (FLSA) exempts from minimum wage and overtime requirements those employees employed in a “bona fide executive, administrative, or professional capacity . . . as such terms are defined and delimited from time to time by regulations of the Secretary.” Despite this statutory mandate, before August of this year, the department had not updated the duties tests defining these terms since 1949, the salary basis test since 1954, or the minimum salary level since 1975. Although the old rules provided guidance on how to classify jobs such as “straw bosses” — jobs that now exist only on the History Channel — they provided little guidance on how to classify the jobs of the modern workplace. Moreover, under the old rules, workers earning as little as $8,060 could be properly classified as exempt from overtime protections. Every administration since that of President Jimmy Carter has recognized the need to update the overtime rules. Workers, employers, and even experienced lawyers found the old rules difficult to understand, and many workers were wrongfully denied overtime because of the confusion. More and more workers had to resort to lengthy litigation to obtain what should have been in their regular paychecks — overtime pay. Federal collective actions under the FLSA have tripled since 1997 and now outnumber employment discrimination class actions. SETTING THE RECORD STRAIGHT The department’s new overtime security rules, which took effect Aug. 23, provide much needed clarity and significantly increase the overtime rights of workers. Unfortunately, some have sought to spread misinformation about the new rules. It is important to set the record straight. The final rules nearly triple — from $8,060 to $23,660 — the annual salary threshold under which employees have an automatic right to overtime protection. This substantial increase strengthens overtime protection for 6.7 million low-wage workers who are now guaranteed overtime irrespective of their job duties, including 1.3 million workers who did not previously have the right to overtime. The new rules also ensure that workers paid on an hourly basis receive overtime pay no matter how much they earn, what title they hold, or what duties they perform. And, for the first time, the rules now contain explicit language guaranteeing the overtime rights of blue-collar workers, union members protected by collective bargaining agreements, police, firefighters, licensed practical nurses, paralegals, and many others, irrespective of how much they earn. In addition, and contrary to claims made by opponents of the new rules, the department has enhanced overtime protection for workers with salaries above $23,660 by updating and strengthening the duties tests that determine exempt status. For example, the old duties test for the executive exemption that applied to workers earning $13,000 or more contained two requirements that had to be met before a worker could be deemed exempt and denied overtime. The final rules retain these two requirements and add a third requirement. Therefore, the new rules certainly make it more difficult for an employer to classify an employee as exempt. Some opponents of the rules have argued that they will strip overtime rights from working supervisors, claiming that the department has eliminated the “requirement” that exempt executives must spend more than 50 percent of their time on supervisory work. This charge is untrue. As an initial matter, the old rules did not have a bright-line 50 percent time requirement. As numerous courts have recognized, and as the Wage and Hour’s Field Operations Handbook provides, the 50 percent test has always been just a “rule of thumb.” The old regulations expressly provided that in “situations where the employee does not spend over 50 percent of his time in managerial duties, he might nevertheless have management as his primary duty if the other pertinent factors support such a conclusion.” That principle is unchanged under the new rules. In addition, the new rules specifically protect the overtime rights of “relief supervisors” and “working supervisors,” such as those working “on the production line in a manufacturing plant.” The final rules mirror the old rules’ duties tests for administrative and professional employees. As the U.S. District Court for the District of Columbia recently recognized in Robinson-Smith v. GEICO: “The general criteria for employees employed in a bona fide administrative capacity are essentially the same under the August 2004 Regulations as under the [then] current regulations.” The GEICO decision also demonstrates the fallacy of the claim that the rules automatically exempt categories of employees, such as claims adjusters, based on their job title alone. As both the court and the new rules make clear, an employee’s status turns on the individual job duties performed, not any job title. Opponents of the rules also argue that two million “team leaders” will become exempt under the administrative exemption. This claim is patently false, as a comparison of the text of the old and new rules makes clear. The new rules note, as an example, that the administrative exemption could apply to an employee who “leads a team of other employees assigned to complete major projects for the employer,” and give examples such as “purchasing, selling or closing all or part of the business, negotiating a real estate transaction or a collective bargaining agreement, or designing and implementing productivity improvements.” This example is significantly more protective of employees than the old rules, which stated more broadly that the exemption applied to “a wide variety of persons” who “carry out major assignments” or whose work includes such general tasks as “advising the management, planning, negotiating, representing the company, purchasing, promoting sales, and business research and control.” VIGOROUS ENFORCEMENT The overtime security rules have put in place much needed overtime protections for millions of workers. By incorporating in one place guidance from decades of relevant federal court decisions and Wage and Hour opinion letters and other guidance, the new rules and their comprehensive preamble illuminate the proper interpretation of the duties tests. Indeed, the final rules already have proved to be a catalyst for compliance. Media reports since the rules’ effective date confirm that, as employers have reviewed how they classify employees, many workers are becoming eligible for overtime for the first time. Because of these updates to the rules, money previously spent on wasteful litigation now can be dedicated to creating more and better jobs for workers. And workers will get their overtime pay as they earn it, rather than having to wait through years of litigation. To ensure that the new rules are properly applied, the department has created a Web site dedicated to promoting understanding of the regulations. That site, at www.dol.gov/fairpay, provides the full text of the new rules and preamble, and a wide array of compliance assistance materials designed to help workers understand their rights and employers their obligations. The department has also established an overtime security task force charged with identifying workers who have been misclassified as exempt and recommending enforcement. In addition, our office will file amicus briefs in private FLSA cases to ensure that workers are not misclassified. As these efforts demonstrate, the Department of Labor is committed to vigorous enforcement of the overtime security rules so that workers gain the enhanced overtime protection that these rules provide. And we are going to enforce the rules as they are written, not as they might be inaccurately described by opponents of the rules. Nothing could hurt workers more than the recent amendments passed by the House of Representatives and the Senate Appropriations Committee that would, if ever enacted into law, prevent the department from spending the necessary funds to administer and enforce these new, stronger worker protections. We are confident that the new rules will remain in effect, and we are continuing to vigorously enforce these stronger protections on behalf of workers. Howard M. Radzely is the U.S. solicitor of labor, and Steven J. Mandel is the associate solicitor for the Fair Labor Standards Division.

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