Chao: FLSA Amendments Going Into Effect March 31

US Senator Arlen Specter (R – Pennsylvania) had asked Chao to delay the possible March 31 implementation of amendments to regulations until September.   However, Chao said “en ough time has been spent on delays and studies of all sorts,” telling Specter she is more concerned about the $2 billion dollars a year employers are spending on “needless litigation” brought by workers seeking overtime pay, according to a Washington Post report.

Specter, chairman of the Senate Appropriations subcommittee on labor, had called the hearing to provide a “full airing of the issue” of reworking the overtime provisions of FLSA.   The DoL is proposing the first comprehensive overhaul in more than 50 years of the white-collar exemption tests used to determine whether an employee must be paid overtime or is exempt from the minimum wage and overtime requirements of FLSA. Currently, there are three tests for whether or not an employee is ineligible for overtime:

• the employee’s level of pay
• whether or not the employee is a salaried or hourly worker
• whether or not the employee performs certain job duties.

As the rules stand, any employee making more than $155 a week (about $8,000/year) could be excluded from overtime, if they had a salary and a job description that fell into certain categories.

The proposed regulations would have lifted the cutoff to $425 a week (about $22,100/year), a step that could add about 1.3 million lower-wage workers to the ranks of people eligible for overtime and could go into effect as early as 2004, according to DoL (See   White House Proposes Overtime Rules Overhaul). 

After the hearing,Specter said he could do little to stop the Bush administration from implementing the changes, which he criticized at the hearing as endangering workers’ overtime earnings and further complicating already-complex employment laws.