The Overtime Security Rules -- Are You Ready?

On April 20, 2004, the United States Department of Labor, for the first time in over 50 years, issued new regulations addressing certain exemptions from overtime under the Fair Labor Standards Act.  These new “overtime security rules”, as they are called, revise both the salary and duty tests for claiming that an employee is not eligible for or “exempt” from overtime pay.  The overtime security rules are scheduled to take effect at the end of this summer and, according to Labor Secretary, Elaine L. Chao, they will dramatically increase the number of workers who will be guaranteed overtime.  In large part, this results because the overtime security rules virtually triple the minimum salary threshold for exemption.  Under the existing regulations, workers earning more than $8,060 annually, in some cases, can be classified as exempt.  Under the new rules, workers earning less than $23,650 are guaranteed overtime, regardless of their job title or duties.