Overtime Pay Regulations

ALEXANDRIA, Va., July 3 2003 /U.S. Newswire/ - The Society for Human Resource Management (SHRM) today said the Department of Labor's efforts to update the Fair Labor Standards Act (FLSA) will clarify the extremely complicated regulations, and also open the door for nearly 1.3 million more American workers to receive overtime pay.

Following a 90-day comment period ending June 30, the DOL is reviewing comments regarding its proposed changes to the white-collar exemption rules, Section 541 of the FLSA, which will affect every U.S. employer. The regulations governing exempt and non-exempt employees are more than a half-century old and no longer apply to many jobs in the workforce, making them vague and extremely difficult for human resource (HR) professionals to comply. For the last 12 years, the definition of an exempt employee under FLSA has been the number one question SHRM receives from its members, with over 8,000 calls on the issue in 2002 alone.

"More than one million American workers could be eligible for overtime pay but are not currently because regulations have not kept pace with the changing workforce," said SHRM President and CEO Sue Meisinger, SPHR. "The changes proposed by the DOL will mean more money in the pockets of low-level employees who are currently salaried and not receiving overtime pay. It's unfortunate that unfounded fears around this issue and potential congressional action could jeopardize a long overdue update to these regulations."

The 65 year-old law, which hasn't been updated in decades, is out of touch with workers and a workplace that bear little resemblance to that of the post-depression era. Employers struggle to apply regulations that describe jobs and duties that no longer exist. Not surprisingly, this has led to an increase in FLSA lawsuits, the most rapidly growing area of employment class-action litigation.

"The jobs and responsibilities of today's workers don't fit into the neat little boxes envisioned by the Depression-era drafters of the FLSA," Meisinger added. "Consequently, HR professionals, who are responsible for interpreting the confusing, ambiguous regulations, must try to apply them in an equitable manner. The proposed changes would streamline the criteria used for determining exempt/non-exempt status by utilizing an objective test that takes both the salary and the job duties into account."

Given the rapid changes in the workplace and workforce, and the complex and confusing nature of the FLSA, the Society has long pushed for necessary and reasonable revisions.

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