Thank you for sharing!

Your article was successfully shared with the contacts you provided.
New federal regulations proposed Thursday could drastically change, for the first time in half a century, which workers qualify for overtime wages. Nearly 22 million Americans could be affected by new definitions of white- and blue-collar workers. Such an overhaul would result from changes the Labor Department proposed to regulations tied to the 1938 Fair Labor Standards Act, which determines who must be paid a time-and-a-half hourly rate for working more than 40 hours a week. Almost 110 million workers are covered by that law. The changes could cost businesses $870 million to $1.57 billion. The largest pocketbook impact would be felt by lower-income workers and highly compensated, professional employees. For the first time, employers would be required to pay overtime to as many as 1.3 million lower-income workers who put in more than 40 hours a week. The regulatory proposals, which are subject to a 90-day public comment period, require no congressional action and could become official late this year or early next. But about 640,000 white-collar professionals who now are required to get overtime pay, such as some engineers and pharmacists, would lose it. Another 10.7 million workers whose pay status is uncertain now would get clarification — meaning some would gain and others would lose overtime. Union officials have said they would oppose any changes that would cause longer workweeks, arguing that required overtime pay is the only brake stopping many employers from demanding excessive work hours. “We’re concerned that these rules could weaken the tradition of the 40-hour work week,” said Kathy Roeder, spokeswoman for the AFL-CIO. The project has been in the works by the Bush administration for 1 1/2 years, but debated by previous administrations for decades. Salary levels in the complex wage and hour rules haven’t been updated for 28 years. The last revision to job descriptions was 54 years ago, and many no longer exist, such as key punch operators, straw bosses, leg men and gang leaders. The revisions are “moderate and measured,” said Tammy McCutchen, administrator of the Labor Department’s wage and hour division. “Easy, clear rules mean employees will understand when they’re entitled to overtime, employers will know what their obligations are and the Department of Labor will be able to more vigorously enforce the law,” she said. Business groups long have complained that the complicated and outdated rules require overtime pay for already well-compensated and highly skilled professionals. A surge in overtime pay lawsuits aimed at employers also is a concern. Workers filed 79 federal collective-action lawsuits seeking overtime pay in 2001, surpassing for the first time class action job discrimination suits against employers, according to the American Bar Association. Under the proposal, any worker earning less than $22,100 a year automatically would be entitled to overtime pay, regardless of whether they are paid hourly or earn an annual salary. Jobs most affected would be assistant managers of stores, restaurants and bars, McCutchen said. Those workers would get overtime pay despite their management status as long as they earn less than $22,100 a year. However, companies also could decide to boost salaries above the cap to avoid paying overtime. Employers could face $334 million to $895 million in direct payroll costs for those changes. Current law exempts workers from overtime pay if they earn more than $155 a week, or $8,060 a year, but meet other convoluted, confusing job criteria, such as devoting at least 80 percent of their time to “exercising discretion” and other “intellectual” tasks that cannot be “standardized in … a given period of time.” Proposed changes and clarifications to definitions of administrative, executive and professional jobs would exempt about 640,000 workers now receiving overtime pay. Generally, workers would be exempt in the new rules if they manage more than two employees and have the authority to hire and fire, or if they have an advanced degree or similar training and work in a specialized field, or work in the operations, finance and auditing areas of a company. Copyright 2003 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.