TOPICS > Politics

New Overtime Rules Go Into Effect

BY Admin  August 23, 2004 at 1:45 PM EST

The Labor Department says 107,000 workers might lose overtime, but 1.3 million employees will gain it because of the new law that they refer to as “FairPay” rules.

Workers earning less than $23,660 a year become eligible for overtime under the new rules, which means employers must pay time and a half to employees who work in excess of 40 hours each week.

Some say the 154-page document is confusing to employers, with the exception of the clear-cut new salary requirement for automatic overtime eligibility.

“There is just going to be continued confusion,” said Anita Raman, vice president of operations for PrO Unlimited Inc., a company that helps employers understand employment laws. “Employers really thought with the new law, ‘I’ll definitely be able to figure out who’s exempt and who isn’t.’ They are still wandering around trying to figure out how to classify correctly,” Raman told The Washington Post.

The rules have been hotly debated in the Senate, which voted to block the rules in May, a move led by Sen. Tom Harkin, D-Iowa.

Both Sen. John Kerry of Massachusetts, the Democratic presidential nominee, and his running mate, Sen. John Edwards, D-N.C. have spoken out against the new law.

“If you work hard, then you should be rewarded for that effort,” Edwards said Sunday in the Democrats’ weekly radio address. “Why would anyone support this new rule, which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year?”

While critics have said that more workers will be exempt from overtime under the new regulations, the Department of Labor says otherwise.

“Millions of workers in America will benefit from the Department of Labor’s new, stronger overtime protections,” Deputy Secretary of Labor Steven Law told The Washington Post.

White collar workers who earn more than $100,000 could lose their overtime unless they do not have professional, administrative or executive duties. Some professions are identified as typically exempt, such as pharmacists, dental hygienists, physician assistants, accountants, chefs, financial services industry workers, journalists, and executive and administrative assistants.

Nurses paid hourly will received overtime, but those on salary no longer have to be paid overtime. First responders — police, firefighters and rescue workers — cannot be exempted from overtime.

The AFL-CIO intends to rally at the Labor department on Tuesday to dispute the new law.