Overtime workers screwed

Businesses plan for overtime law changes
Tracy Kershaw-Staley
DBJ Staff Reporter
Dayton-area employers are readying their businesses for the most sweeping revisions to overtime regulations in nearly 50 years.


The U.S. Department of Labor's FairPay Overtime Initative, which updates the 1938 Fair Labor Standards Act, sets new requirements for who qualifies for overtime pay. It goes into effect Aug. 23.

"The changes in the rules have gotten enough exposure that a lot of employers already have taken steps to change their practices or make sure their practices are in compliance with the new regulations," said Scott Stirling, a labor and employment lawyer with the Dayton office of Thompson Hine.

The changes have been lauded by many business owners as a much-needed modernization of the overtime regulations. The Department of Labor estimates that 1.3 million more workers now will qualify for overtime pay. Business leaders pushed for the changes, saying the murky regulations were causing too many lawsuits from workers who felt they should be paid overtime. Yet many Democratic policymakers and union leaders have cautioned that changes will leave millions of workers ineligible for overtime pay.

Under the new regulations, workers who earn $23,666 or less annually are guaranteed overtime, up from the old threshold of $8,060, which was set in 1975. Those who make $100,000 a year cannot earn overtime.

But how the new regulations will affect workers who fall between those limits continues to be debated. Employers must judge if their workers' job duties meet certain tests and standards set by the Department of Labor that exempt workers who earn between $23,666 and $100,000 from overtime pay.

The most significant changes, aside from the salary adjustments, are the new standard duties tests. The new rules replace the old tests with new standards in five categories: executive, learned professional, administrative, computer and outside sales exemptions. For a detail list of the new changes, visit www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm.

The intense pressure from Democratic officials and labor leaders pushed Labor Secretary Elaine Chao to scale back the plan in April, raising the overtime salary cap from a proposed $65,000 a year to the final $100,000 annual salary. She also revised the proposal to ensure police officers, firefighters, emergency medical technicians and other safety workers, as well as nonmanagement blue-collar workers, such as carpenters, plumbers, and iron workers, will not lose their overtime rights.

Yet local labor leader Wesley Wells said he still believes the changes will cripple overtime for millions of workers. He cited a study from the Economic Policy Institute, a liberal research organization, that showed 6 million workers would lose overtime rights under the new regulations.

"I think it will have a real adverse effect here. People really depend on overtime work in order to meet their needs," said Wells, executive director of the Dayton-Miami Valley AFL-CIO.

Registered nurses are one of the professions critics of the initiative said is in danger. Under the new plan, employers could decide nurses may not qualify for overtime under the "learned professional" exemption.

http://www.bizjournals.com/dayton/stories/2004/08/09/story6.html