New Overtime Regulations Tomorrow
8/22/04
By: Andria Y. Carter, Trentonian
TRENTON -- Employees that normally received overtime may want to check with their employers tomorrow if this has changed, as businesses begin complying with the new federal overtime regulations.
The highly controversial Fair Labor Standards Act is the first comprehensive update of the overtime regulations in 50 years, government officials stated in April.
The new regulations issued by the U.S. Department of Labor guarantee overtime for white-collar workers earning up to $23,660. Blue-collar workers or workers covered by labor contracts are exempt from the new regulations even if they earn over $100,000. Prior to the guarantee, many feared police, firefighters and others could lose their eligibility.
U.S. Department of Labor Secretary Elaine Chao stated in an April editorial the new rules would clear up mounting confusion over who is entitled to overtime by updating the regulations. Businesses also benefit by stopping "needless litigation."
"This confusion has spawned a legal nightmare. Federal class-action lawsuits on overtime have surpassed even discrimination class action litigation," Chao wrote.
The DOL claims only 107,000 workers will lose their overtime eligibility under the new rules while 1.3 million will gain overtime status. Chao also claims it will strengthen the protection of 5.4 million employees.
Politicians, lobbyists and unions who fought against the changes claim more than 6 million people will be affected by the changes, hitting them directly in the pocketbook.
"These new regulations represent the largest middle-class pay cut in history -- starting Monday, more than 6 million workers will lose their right to overtime pay," said House Democratic Leader Nancy Pelosi.
Positions gaining overtime protection include office workers, cooks, inspectors, paralegals, licensed practical nurses, technicians and retail managers.
"Millions of workers who are directly affected by the new rule will have to work longer hours for less money. And the impact will be felt by millions more who will no longer have the opportunity to work overtime because their overtime hours will now go to those who are newly exempt from overtime protection," Pelosi added.
FLSA’s impact upon the business community may not be as bad as many fear as 18 states including New Jersey have separate overtime laws that are stronger than the federal laws. In New Jersey those who received overtime continue to receive overtime despite the federal changes, the New Jersey Labor Department had stated earlier this year.
Attorneys at Littler Mendelson, the nation’s largest labor and employment law firm are finding that many employers are needing more time than the 120 days provided to comply with the new regulations prior to the Aug. 23 deadline.
Those companies who fail to comply with the new regulations could be subjected to overtime back pay, liquidated damages amounting to double the back pay owed, attorneys fees and costs, and they could leave themselves open to DOL proceedings or employee lawsuits.
Compensation Resources, Inc. recently released a survey taken in May and June of 157 businesses that are coping with the new overtime regulations.
The Upper Saddle River company learned that 31 percent of those who responded indicated that 0 percent of their workforce will be newly eligible for overtime. Twenty-four percent surveyed said only 1 to 10 percent of their workforce will become eligible for overtime under the new regulations.
Now updating its survey, the organization to learn who is complying with the new regulations, Compensation Resources learned 77 percent of those surveyed are complying with the regulations. Twenty-four percent are complying or looking into complying while 33 percent said they have complied with the new regulations, said Paul Dorf, managing director of Compensation Resources, Inc.
