The U.S. Department of Labor recently issued new regulations governing the so-called white collar exemptions” under the Fair Labor Standards Act (FLSA). The regulations take effect August 23, 2004. These changes are designed to simplify and update the criteria for implementing the exemption from minimum wage and overtime pay for executive, administrative, professional, outside sales and computer employees.
Even though there is activity in Congress and elsewhere to derail the new regulations, rule changes most likely will take effect as scheduled according to sources familiar with the issue. “Barring any drastic action, the new rules will go into effect, and employers now should be preparing by conducting thorough reviews of their job classifications,” said Michael Aitken, director of governmental affairs for the Society for Human Resource Management.
For your employees to be exempt they must satisfy two tests.
- receipt of the required weekly minimum salary that is not subject to reduction except in very limited, specified circumstances (professional and administrative employees may be paid on a fee basis and outside sales workers on a commission basis); and
- the applicable job duties test.
Some of these changes that impact these two tests include:
- A revised salary level test, exempt employees must receive at least $455/week $23,660/year (an increase from the current $155 /week 8,060/year)
- A redefined duties test for each exemption executive, administrative, professional, outside sales and computer employees.
The good news is that
- The final rules describe numerous positions that meet the basic requirements for the administrative exemption. The illustrative list includes insurance claims adjusters, financial services employees, and human resources professionals, as well as employees performing work in tax, auditing, marketing, quality control, and other fields.
- Particularly helpful for health care employers are the learned professional examples and explanations illustrating the application of the exemption, including occupations that properly are classified as exempt:Registered or certified medical technologists, Registered nurses, Dental hygienists, Physician's assistants etc.
The results of incorrectly identifying exempt employees from overtime pay requirements could lead to compliance problems for your organization.
Your can refer to the DOL website for further information.
http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm