In March of 2003, the U.S. Department of Labor (DOL) proposed significant revisions to its “white-collar” overtime pay exemptions. The proposal resulted in a political firestorm (led by Congressional Democrats) due to a belief that large numbers of employees would lose eligibility to receive such pay. After additional adjustments were made, however, new Fair Labor Standards Act (FLSA) overtime regulations went into effect August 23, 2004. The DOL has alerted employers that it will enforce the regulations vigorously. This essay outlines the new rules. In some instances, employers will now find it easier to classify an employee as exempt; in other cases, it will be more difficult. Overall, the new regulations clarify and update the exemptions but likely will not result in a greater number of employees being eligible for exemption.
