The Fair Labor Standards Act (FLSA) is the federal law that
requires employers to pay most employees in the United States at
least the federal minimum wage (currently $5.15 per hour) for all
hours worked, as well as overtime pay at time and one-half an
employee's regular pay rate for all hours worked in excess of 40
hours during a workweek. However, FLSA also exempts employees who
are executive, administrative, professional and outside sales
employees from receiving overtime pay.
On March 31, 2003, the U.S. Department of Labor (DOL) proposed
regulatory changes to FLSA overtime laws. DOL reviewed more than
75,000 public comments on its draft regulations before finally
publishing its long-awaited rule April 23. The rule is intended to
simplify and update current overtime requirements. The final rule
significantly revises the 54-year-old "white-collar" exemptions for
executive, administrative and professional employees and clarifies
the existing regulations for outside salespeople and computer
employees (such as computer system analysts, computer programmers
and software engineers). The final rule does not address factory
workers, other "blue-collar" workers or those covered by
collective-bargaining agreements who always have been entitled to
overtime pay and will continue to be. In addition, the revised rule
does not cover a number of other issues employers face under FLSA,
such as when compensable work begins and ends. The final rule is
scheduled to go into effect Aug. 23.
The highlights of the changes to the overtime rules include an
increase in the minimum salary level necessary to qualify for
executive, administrative and professional exemptions from overtime
pay. According to the current rule, an employee earning $155 a week
can qualify as a "white-collar" employee and not be entitled to
overtime pay. The new rule raises the minimum salary to $455 per
week. As a result, employees who have exempt duties but are being
paid less than $455 per week now will be...
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