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Review Of Proposed Changes To Overtime Exemption Law
02-26-04
RTO Online
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In March of 2003 the Department of Labor (DOL) announced it's intention to "modernize" its 50-year-old regulations defining exemptions from the Fair Labor Standards Act (FLSA) for “white-collar” employees. According to the DOL, the proposed changes would guarantee overtime pay for 1.3 million more low-wage workers.

During congressional testimony in January, U.S. Secretary of Labor Elaine L. Chao said the proposed changes would "strengthen overtime protections for millions of low-wage and middle-class workers and empower workers to understand and insist on their overtime rights." Secretary Chao added, "If the Department is blocked from issuing updated, stronger overtime protections, these workers will continue to suffer.” The Department’s proposed regulations would raise the salary threshold—below which workers would automatically qualify for overtime from $155 to $425 a week. This increase of $270 a week would be the largest since Congress passed the FLSA in 1938.

The following following table provides a side by side comparison of the current requirements versus the proposed requirements for exemption from the Fair Labor Standards Act for the following positions: Executive, administrative, professional or computer employee.

Printable version of this table here
 

Executive Employees

 

Current Long Test

Current Short Test

Proposed Standard Test

Salary $155 per week $250 per week $425 per week
Duties Primary duty of the management of the enterprise or a recognized department or subdivision.

Customarily and regularly directs the work of two or more other employees.

Has authority to hire or fire other employees (or recommendations as to hiring, firing, promotion or other change of status of other employees are given particular weight).

Customarily and regularly exercises discretionary powers.

Does not devote more than 20 percent (40 percent in retail or service establishments) of time to activities that are not directly and closely related to exempt work.

Primary duty of the management of the enterprise or a recognized department or subdivision.

Customarily and regularly directs the work of two or more other employees.

Primary duty of the management of the enterprise or a recognized department or subdivision.

Customarily and regularly directs the work of two or more other employees.

authority to hire or fire other employees (or recommendations as to hiring, firing, promotion or other change of status of other employees are given particular weight).

Administrative Employees

 

Current Long Test

Current Short Test

Proposed Standard Test

Salary $155 per week $250 per week $425 per week
Duties Primary duty of performing office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers.

Customarily and regularly exercises discretion and independent judgment.

Regularly and directly assists a proprietor, or exempt executive or administrative employee; or performs specialized or technical work requiring special knowledge under only general supervision; or executes special assignments under only general supervision.

Does not devote more than 20 percent (40 percent in retail or service establishments) of time to activities that are not directly and closely related to exempt work.

Primary duty of performing office or non-manual work directly related to management policies or general business operations of the employer or the employer’s customers.

Customarily and regularly exercises discretion and independent judgment.

Primary duty of performing office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers. a “position of responsibility” with the employer, defined as either (1) performing work of substantial importance or (2)performing work requiring a high level of skill or training.

Learned Professional Employees

 

Current Long Test

Current Short Test

Proposed Standard Test

Salary $170 per week $250 per week $425 per week
Duties Primary duty of performing work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study.

Consistently exercises discretion and judgment.

Performs work that is predominantly intellectual and varied in character and is of such character that the output produced or result accomplished cannot be standardized in relation to a given period of time.

Does not devote more than 20 percent of time to activities that are not an essential part of and necessarily incident to exempt work.

Primary duty of performing work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study.

Consistently exercises discretion and judgment.

Primary duty of performing office or non-manual work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction, but which also may be acquired by alternative means such as an equivalent combination of intellectual instruction and work experience.

Creative Professional Employees

 

Current Long Test

Current Short Test

Proposed Standard Test

Salary $170 per week $250 per week $425 per week
Duties Primary duty of performing work that is original and creative in character in a recognized field of artistic endeavor, and the result of which depends primarily on the invention, imagination, or talent of the employee.

Consistently exercises discretion and judgment.

Performs work that is predominantly intellectual and varied in character and is of such character that the output produced or result accomplished cannot be standardized in relation to a given period of time.

Does not devote more than 20 percent of time to activities that are not directly and closely related to exempt work.

Performs work requiring invention, imagination, or talent in a recognized field of artistic endeavor. Primary duty of performing work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Employees

 

Current Long Test

Current Short Test

Section 13(a)(17) Test

Proposed Standard Test

Salary $170 per week $250 per week $27.63 an hour $425 per week or

$27.63 an hour

Duties Primary duty of performing work requiring theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering.

Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field.

Consistently exercises discretion and judgment.

Performs work that is predominantly intellectual and varied in character and is of such character that the output produced or result accomplished cannot be standardized in relation to a given period of time.

Does not devote more than 20 percent of time to activities that are not directly and closely related to exempt work.

Primary duty of performing work requiring theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering.

Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field.

Consistently exercises discretion and judgment.

Primary duty of (A) application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional applications; or (B) design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or (C) design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (D) a combination of duties described in (A), (B) and (C), the performance of which requires the same level of skills.

Employed as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer field.

Primary duty of (A) application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional applications; or (B) design, development, documentation, analysis, creation, testing, or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications; or (C) design, documentation, testing, creation or modification of computer programs related to machine operating systems; or (D) a combination of duties described in (A), (B) and (C), the performance of which requires the same level of skills.

 

 

 

 

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