New Wage And Hour Rules Published
By Evelyn P. Schonberg
On Tuesday afternoon, April 20, 2004 the Department of Labor (“DOL”) printed its new regulations covering the exemptions from overtime. These are the rules that have been the subject of much political wrangling between the Democrats and Republicans in recent months. The regulations will take effect 120 days after they are published in the Federal Register, which is expected to be on Friday, April 23, 2004.
There are many minor as well as major changes to the current overtime regulations, which have been in effect since the 1930’s. Some of the major changes include:
- The minimum salary requirement for each exemption has been raised to $455 per week, or $23,660 per year;
- New duties have been added to the executive and professional exemptions;
- The administrative exemption duties have not been changed, but now include more information in the regulations to better guide employers (at least that is what the DOL is saying);
- A new exemption from overtime pay is included for highly compensated employees, defined as making at least $100,000 per year, if the employee performs office or non-manual work and he or she customarily and regularly perform at least one of the duties in any of the three exemptions;
- The salary basis test has been changed to permit employers to place exempt employees on unpaid disciplinary suspensions of one or more full days for workplace rule infractions;
- A new safe harbor has been established for employers who (1) clearly communicate a policy prohibiting improper deductions and include a complaint mechanism; (2) reimburse employees who have been subject to improper deductions; and (3) make a commitment to comply in the future.
The new regulations are quite voluminous. We here at RBS will be conducting and publishing via Legal Alerts and our newsletter additional in-depth analyses to better advise our clients on the true nature of these changes. In the meantime, be aware that in published comments today, Democratic leaders have vowed to fight the implementation of the regulations. Therefore, we must all pay attention in the coming months to see whether or not these rules will actually take effect, be changed or be defeated.
If you have any questions or concerns, please do not hesitate to contact Lynn Schonberg or Dave Andrews for further information.