Source: http://www.heritage.org/research/reports/2004/08/modernizing-overtime-regulations-to-benefit-employers-and-employees
Timestamp: 2013-05-20 07:38:33
Document Index: 66572945

Matched Legal Cases: ['§201', '§213', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541', '§541']

Modernizing Overtime Regulations to Benefit Employers and Employees
Backgrounder #1789
August 16, 2004 Print PDF
Email	Print PDF	Much
controversy surrounds the U.S. Department of Labor's decision to
update regulations governing "white-collar" exemptions from the
Fair Labor Standards Act (FLSA). Labor union officials have
interpreted the new regulations as the end of overtime pay for
millions of workers. In reality, however, relatively few workers
are likely to lose overtime pay under the new regulations, which
will simply clarify, simplify, and update regulations that date
Clear, simple, and up-to-date standards
will benefit both workers and employers. The new regulations will
enable workers to recognize more easily when they are owed overtime
pay and will reduce investigation and enforcement costs when
violations occur. Employers will benefit from clearer rules that
limit the risk of legal confusion, which can lead to costly
litigation. An update of the white-collar regulations is long
overdue, and Congress should allow the new regulations to take
Current Regulations Are Outdated
Fair Labor Standards Act of 1938 established both a minimum wage
and a standard workweek for American workers. Updated numerous
times since 1938, the current FLSA calls for a minimum wage of
$5.15 per hour and a 40-hour workweek.1 The workweek rule is not absolute, but
employees must be paid an additional 50 percent ("time and a half")
for time worked beyond the standard 40 hours.
FLSA exempts some workers from its minimum wage and overtime pay
requirements. Among the most important of these exemptions are the
"white-collar" exemptions, which cover "any employee employed in a
bona fide executive, administrative, or professional capacity."2 Because white-collar
workers tend to be paid more than other workers and white-collar
work frequently requires longer hours, the debate over the
white-collar exemptions tends to be cast in terms of overtime
eligibility.3
Between 1938 and 1954, the rules for the
white-collar exemptions evolved substantially to reflect changes in
the workplace. For instance, the first regulations had one set of
exemption rules covering both executive and administrative
personnel, while later regulations separated these two categories.
In 1949, the Department of Labor (DOL) further defined the terms
used in the earlier regulations, and in 1954, it revised the salary
basis test for white-collar employees.
1954 revision settled the basic structure of the current
white-collar regulations. Under this structure, in order to qualify
for exempt status, an employee was required to meet:
A salary basis test, which stipulated that
exempt white-collar employees must not be paid on an hourly or
piecework basis;
A salary level test, which required that a
white-collar employee's compensation must meet a minimum amount in
order for that employee to be considered exempt; and
A duties test, which defined the types of
work assignments an exempt executive, administrator, or
professional might perform.
duties tests took two forms: a stricter long test and a less
stringent short test that applied to higher-paid employees.4
workforce has continued to evolve since 1954, but the white-collar
regulations have remained relatively static. Changes in the
white-collar regulations have been directed at specific groups of
employees or have consisted of updating the minimum salary levels.
The duties tests for most workers have not changed since 1954, and
the salary levels have not been updated since 1975.
The Case for New Regulations
Failure to update the white-collar
regulations has negatively affected both workers and employers. As
a result, salary rules are outdated, and employers find it
increasingly difficult to follow the law and avoid large
Regulations Contain Unrealistically
Low Salary Levels
For employees, the failure to update the regulations has
left salary levels for exempt white-collar workers at laughably low
levels: $155 a week (or $8,060 per year) for executives and
administrative employees and $170 a week for professional
employees. Furthermore, the "short test" comes into play at only
$250 per week (or $13,000 per year). Inflation has eroded the
salary levels to the point that virtually all full-time employees
meet the salary level test, and the short test--originally intended
for higher-salaried workers--now applies to the overwhelming
majority of employees.5
practice, substituting the short test for the long test has had the
greatest effect on low-level supervisors, who are much more likely
now to qualify as executives and thus to be exempt from overtime
pay. The short test for executives requires only that the employee
regularly supervise two or more other workers and that his or her
primary duty involve management. Substantial judgment or
decision-making authority is not necessarily required.
federal court decisions in 1982 arising from litigation between DOL
and Burger King Corporation found that assistant managers at the
chain's restaurants could qualify as executives, even if they spent
more than half of their time preparing food.6 The low threshold for the executive
exemption has created an incentive for some employers to multiply
the number of departments within their operations, allowing them to
expand the number of exempt executives.7
Rules Are Increasingly Difficult to Apply
Out-of-date rules create legal problems for even the
most scrupulous employers. The sole remedy for a violation of
overtime pay regulations is restitution of back pay, even when the
failure was entirely due to an employer's good-faith mistake or to
the confusion created by an unclear rule that a court interpreted
the three tests, the duties test is usually the most difficult to
apply. Real-world examples would be extremely valuable, but the
examples given in the 1954 rules are increasingly out of date. The
"current" rules include examples of how to classify linotype
operators, machine men, and straw bosses8 but say little or nothing about more
current job titles such as physicians' assistants, licensed
practical nurses, or paralegals. Outdated rules make it much more
difficult for workers and employers to apply the duties tests.
Whenever the white-collar regulations are
the subject of litigation, employers bear the burden of showing why
an employee is exempt. When rules are vague and details are
lacking, that burden becomes even more difficult for employers to
meet. For example, in Hashop v. Rockwell Space Operations, a Texas
federal court ruled that a team of scientists and engineers who ran
simulated space shuttle missions for the U.S. space program did not
qualify as professionals because they did not exercise sufficient
discretion and independent judgment.9 The court found that lengthy guidelines
on discretion were applicable to the administrative exemption but
were of limited value in cases involving the professional
exemption. The court went on to conclude that the team's work did
not qualify them for the professional exemption, even though every
team member had a minimum of a bachelor's degree and performed work
that required a high degree of technical expertise.
Another problem that has developed under
the current rules relates to the effects of docking pay. Because
exempt workers must be paid on a salary basis (as opposed to an
hourly basis), reductions in an exempt employee's hours do not
automatically translate into a reduction in pay. The current rules
allow limited pay docking for time off and for violations of major
safety rules, but they make no provision for violations of other
company policies, such as policies on drug or alcohol abuse, sexual
harassment, or misuse of expense accounts.10 Furthermore, the current rules give
little guidance about how a violation of the docking rules can
affect the status of other employees, creating a situation in which
an entire category of otherwise exempt employees--such as a team of
corporate attorneys--can be declared non-exempt because they were
subject to unpaid suspensions for violations of company rules.11
Regulations Cause Expensive (and Unnecessary) Litigation
Back-pay awards can reach astronomical levels. These are
understandable for intentional violations but unjustifiable when
the "violation" is the result of a court interpreting a vague rule
in an unexpected way. For example, if an exempt employee who
receives a modest annual salary of $52,000 while working a steady
50 hours per week is later found to be entitled to overtime pay
(i.e., found to be non-exempt), the employer will owe $5,200 in
back pay for just one year of work. This amount increases with
longer service or higher base salary and can be multiplied by
hundreds (or even thousands) of dollars in larger organizations if
the employees involved can be grouped together as plaintiffs in a
class-action suit.
There have been multimillion-dollar
judgments and settlements in class-action overtime lawsuits. In
2001, a lawsuit based on a California statute similar to the FLSA
resulted in a jury award of $90 million to a group of 2,400
insurance claims adjusters.12
larger judgments involving larger pools of employees are possible.
One lawsuit involving Taco Bell had a potential class of 14,000
employees, and a case involving 69,000 Wal-Mart pharmacists was
reportedly settled out of court for $50 million.13 In many cases, employers could
plausibly argue that the employees involved qualified as exempt
executives, administrators, or professionals.
Vague rules that lead to large judgments
are not necessarily good news for workers either--even those who
win lawsuits. Under clearer rules, many of these workers would
probably receive the same overtime pay without the delay of a
lawsuit and without paying as much as one-third of their awards in
Vague and outdated rules, combined with
the possibility of lucrative large-scale class-action suits
involving years of back pay, have created a storm of high-stakes
FLSA litigation. The number of class-action suits based on the FLSA
climbed from 31 in 1997 to 102 in 2003.14
of Labor Proposes New Rules
The Department of Labor reopened the white-collar
exemption issue in December 2001, announcing its intention to
investigate and revise the regulations. After more than a year of
examination, DOL released proposed rules on March 27, 2003.
Union officials harshly criticized the
proposed rules, arguing that 8 million employees would lose
overtime pay. This estimate was based on misapplications of the
proposed rules, but in spite of the estimate's shortcomings, the
Department of Labor significantly revised its proposal. Assuming
Congress does not interfere, the new rules will take effect on
August 23, 2004.15
Given the sheer size of possible FLSA
overtime lawsuits, continuous changes in the workplace, and the
propensity of courts to construe vague exemption rules against
employers, fairness commands periodic clarifications and updates to
the regulations that determine which employees are exempt from the
FLSA. Congress should not delay revised rules that are already
Comparing the Current and New Rules
comparison of the current and new rules shows that in many critical
areas, the new rules actually give workers more protection than the
current rules. In general, workers who have a settled right to
overtime pay under the current rules will continue to receive
overtime pay under the new rules, and the number of workers with
overtime rights is more likely to increase than to decrease.
New Rules Boost
The one change that nearly all parties would agree is long
overdue is increasing the minimum salary levels for the
white-collar exemptions. The only question is how high the minimum
salary levels should be raised. Currently, executives and
administrators could be exempt while earning as little as $155 per
week (and professionals as little as $170). The new regulations
call for all exempt white-collar workers to earn a salary of at
least $455 per week.
Critics point out that the new salary
levels do not match the rate of inflation since 1954 and argue that
the minimum salary should be raised even further. However, DOL
points out that it arrived at this amount using much the same
methodology and criteria that have been used in prior revisions of
the white-collar rules: examining salary data and selecting a
salary floor at a point at which roughly 10 percent of workers who
pass one or more of the duties tests will still receive overtime
pay. DOL estimates that the increase in the required salary level
will remove 6.7 million workers from consideration for exempt
status--including 1.3 million who will gain the right to overtime
pay and another 2.6 million who are at risk of being
misclassified.16
importance of this should not be underestimated. Setting a more
reasonable threshold for application of the white-collar exemptions
will decrease the risk that these workers will be denied overtime
pay because of either fraud or confusion. A quick check of pay
stubs will confirm that all of these workers are eligible for
overtime pay without any need to discuss job titles or duties.
New Duties Tests
Will Not Strip Overtime Protections
To be classified as exempt (assuming that the salary is
sufficient), an employee's duties must pass the duties test for
executive, administrative, or professional employees. The new
regulations replace the current short and long "duties tests" with
one standard test for each category of white-collar employees.
change will probably have minimal effect on workers because
inflation has rendered the long duties tests largely irrelevant.
However, it simplifies the regulations and allows employers,
employees, and DOL enforcement staff to operate under one basic set
of tests that apply to most workers.
The test for executives has been tightened in the new
regulations. Under the current short test, an executive position is
one in which (1) the employee's primary duty is managing an
enterprise, a recognized division, or department and (2) the job
includes the regular direction of two (or more) other employees.17 The new rules add a
third requirement, pulled directly out of the current long test:
Either an executive must have the authority to hire, fire, or
promote other employees, or the executive's recommendations on
these and other personnel decisions must be given "particular
weight."18
new standard test would provide extra protection to low-level
supervisors. In order to remain exempt from overtime pay under the
new rules, these managers must be given significant authority over
an important aspect of their organizations' operations: the hiring,
firing, and promotion of staff. Consequently, low-level supervisors
will either gain real executive authority or receive overtime
Critics have called attention to the issue
of supervisors who perform work associated with non-exempt
employees, such as retail managers who stock shelves or assist
customers. The new standard test would eliminate a provision in the
long test that limited the amount of time that an exempt executive
could spend on such work.
Critics also have argued that this change
will weaken overtime protection, but as explained earlier, the long
tests apply to an extremely small percentage of workers. Exempt
executives themselves must also determine when they will do
non-exempt work, guided by their judgment of the needs of the
enterprise or division that they lead--a standard that is more
demanding than any rule based on a percentage of time.
Test Remains Largely the Same
The basic test for administrative employees is also based
on the current short test, but it has been tightened up a bit.
Under both sets of rules, administrative employees must perform
office or non-manual work that is directly related to the
management or general business operations of the employer or the
employer's customers.19 Both the current and the new rules
also require that exempt administrative employees must exercise
However, while the current rules merely
require that an exempt position must "include" the exercise of
discretion, the new standard test stipulates that an
administrator's primary duty must include the exercise of
discretion on matters of significance.20 At a minimum, this change will
maintain the status quo, and it may result in more workers gaining
new rules provide details in several critical occupations. Although
the current rules provide little specific guidance for the
financial services sector, the new administrative employee test
provides valuable details, based on court applications of the
current rules, for employees and employers in this fast-growing
field.21 The new
rules also clarify that public-sector inspectors, such as those who
enforce public health and safety laws and standards, generally do
not qualify for exempt status. Various rules dealing with
administrators in educational institutions are brought together
into one section, and rules are provided for career programs and
academic counselors.22 These new rules will provide valuable
guidance for employers and employees without making significant
changes in the scope of the administrative exemption.
new rules also clarify the administrative exemption of insurance
adjusters, giving a fairly detailed description of the type of work
that an adjuster should perform in order to qualify for the
administrative exemption.23 This section is new, but it is based
on prior DOL policy, which at least one federal court has found to
be consistent with the current rules.24
Test Undergoes Minor Changes
While the sections on professionals have been reorganized,
the essential criteria remain the same. To be considered exempt, a
professional's primary duty must consist of work involving advanced
knowledge in a scientific field of learning that typically requires
prolonged intellectual study. The work must involve the consistent
exercise of discretion and judgment, as opposed to routine
calculation or physical work. As in the current regulations, a
provision for "creative" professionals also allows an exemption for
employees whose work involves imagination or talent in a recognized
artistic field such as music or drama.25
Because science, medicine, and law are all
evolving rapidly, professional work is constantly changing.
Consequently, the new rules contain new or updated provisions for a
wide range of occupations, including medical technologists, nurses,
physician's assistants, dental hygienists, accountants, chefs,
paralegals, athletic trainers, and funeral directors. The rules
also allow the recognition of developing professional categories
when a specific academic degree or certification becomes customary
for entry into an occupation--a modification that allows the rules
to keep pace with the constant evolution of the workplace as
scientific and medical knowledge continues to grow. 26
Effects of Pay
Docking Clarified Under the New Rules
Under current rules, exempt employees must be paid on a
salary basis: Compensation should be consistent and not immediately
affected by performance or hours worked. This leaves disciplinary
actions in a grey area. For instance, current rules allow pay
docking for a serious violation of safety rules, but violations of
other policies, such as sexual harassment or misuse of expense
accounts, are not discussed. 27
new rules allow for unpaid suspensions of exempt employees who
violate an employer's standards of conduct if the standards are
written and generally applicable to all employees. They also give
courts better guidance about when improper pay deductions will
result in a larger classification of employees losing exempt
Given the stakes, clear rules on this
point are absolutely necessary. The new rules will allow
conscientious employers to know how to prevent an isolated
violation of the salary basis test from turning into a
multimillion-dollar class-action judgment. However, dishonest
employers who intentionally misuse pay docking and blur the line
between salary and hourly compensation will still be obligated to
compensate their employees for overtime pay and will still be
subject to large judgments when appropriate.28
Compensated Workers' Status May Be Changed
The new rules provide for a looser application of the
duties tests for workers who receive a total annual compensation of
$100,000 or more. These highly compensated workers will be treated
as white-collar employees if their primary duty is office or
non-manual work and if they regularly perform at least one of the
functions of an executive, administrative, or professional
employee.29
effect of this provision should not be overstated. Manual laborers
will not qualify under this standard, regardless of salary.
Although the duties tests will be less stringent, the burden will
still be on the employer to show that exempted workers perform
executive, administrative, or professional duties on a regular
rationale behind this provision is a strong one: While the Fair
Labor Standards Act did not establish a salary test for exempt
employees, compensation level is a strong indicator of white-collar
work.30 Furthermore,
as compensation increases, so does the employee's importance to the
employer. Highly compensated employees will be in a stronger
position to negotiate their hours and, consequently, to protect
themselves from overwork.
Enforcement of the overtime rules should
therefore focus on lower compensated workers, who are likely to be
in a weaker bargaining position and at a higher risk of being
overworked. Together, the higher salary level test and the special
rules for highly compensated workers reflect this commonsense
understanding of the workplace and of the motivation behind the
Clarifying the Rules Does Not Mean That
Workers Will Lose Overtime Pay
Generally, the new rules are intended to
streamline and update the current rules, and most of the principles
behind the current white-collar rules will continue to be
respected. Although there are exceptions, such as the highly
compensated employees, the vast majority of employees who currently
have a clear and settled statutory right to overtime pay will
continue to have a statutory right to overtime pay under the new
rules. In many cases, the new rules update or clarify terms in the
current rules without making any significant policy changes.
Test Remains Intact
The Employment Policies Institute has argued that the new
regulations change the "50 percent rule of thumb" under which an
employee's primary duty is considered to be that which takes up the
majority of the employee's work time.31 The institute argues that the new rule
is one-sided because an employee who spends a majority of time on
management duties would likely be considered exempt, while an
employee who spends a majority of time on manual tasks might still
be considered exempt.32
However, the same criticism could be
leveled at the current rules, which specifically give a
hypothetical example of an employee who spends a majority of time
performing management tasks without mentioning the converse
situation.33 Hence,
although the Department of Labor has updated the "50 percent rule
of thumb," the courts are unlikely to find that a substantive
change was intended.
"Abe Lincoln Exception."
Likewise, there is no significant change in the
professional exemption in terms of the education needed to
qualify--although some commentators have asserted otherwise. The
new rules do provide for treating an employee with an advanced
degree as an exempt learned professional as long as the employee
has substantially the same knowledge and performs the same work as
a professional with a degree.34 The current regulations contain a
similar provision.35
the current and new rules make allowance for the rare case of a
person, such as self-taught attorney Abraham Lincoln, who gains
acceptance into a profession by apprenticeship, work experience, or
individual study. Both the current and the new regulations even
give the same examples, verbatim: "the occasional lawyer who has
not gone to law school, or the occasional chemist who is not the
possessor of a degree in chemistry." Again, courts are unlikely to
find a substantive change.
Rule Not Likely to Have Wide Effect
A new provision under which "team leaders" are considered
exempt administrators has also been the subject of controversy.
Some have speculated that the leaders of millions of workplace
teams established to improve quality, safety, morale, or customer
service would qualify under the "team leader" rule and that
blue-collar employees would thus be effectively converted into
exempt managers.36
However, team leaders are not managers:
The provision for team leaders is an application of the
administrative exemption.37 Among other things, this means that
team leaders must perform primarily office or non-manual work that
involves the exercise of discretion and independent judgment. The
team leader provision should have little effect on blue-collar
general, policymakers should avoid the mistake of equating
clarification of the exemptions with expansion of the exemptions.
Sections of the new rules that provide detailed specifications for
specific industries or occupations may result in the expansion or
contraction of the exemptions, removing or bestowing overtime
protections on employees, but they are more likely to be a
distillation of court rulings and DOL enforcement policies or
resolutions of contradictory rulings. Policymakers should carefully
examine claims that new provisions will eliminate overtime
protections, considering all relevant portions of the both the
current and new regulations, as well as court rulings and DOL
the next few weeks, Congress is expected to consider a number of
measures to prevent or alter the new white-collar regulations, but
it should resist the temptation to intervene. Specifically,
block the new regulations by passing a Congressional
Review Act Resolution or by inserting language preventing their
enforcement into the DOL appropriation. Either action would leave
outdated and convoluted rules in place to the detriment of
mandate that workers who are entitled to overtime under
current rules may not lose that protection under subsequent
versions. Although this might seem consistent with DOL's
intentions, it would force the courts to examine employees under
both new and current regulations, adding further complexity to FLSA
consider legislation stating that specific, enumerated
occupations are not to be exempted. Each enumerated occupation
would, in turn, require its own regulatory definition, increasing
the burden on DOL's regulatory staff and enforcement
Congress could make one constructive
change by mandating periodic review of the white-collar exemptions.
Fifty years is too long to wait between updates of the white-collar
rules. A fresh review of white-collar exemptions every five or 10
years would reduce the extent to which out-of-date regulations can
harm employers and employees.
Empowered, informed workers are the first
line of defense against dishonest employers who seek to evade the
requirements of the Fair Labor Standards Act. The new regulations
reflect this. The new salary requirements, combined with simpler,
clearer, and more up-to-date duties tests will make it easier for
employees to recognize when their rights are being violated.
Needlessly complicated, out-of-date, and
unclear rules do not benefit employees. Such rules are more likely
to encourage litigation, draining resources from employers and
employees. Expensive litigation has the perverse effect of drawing
attention away from low-wage workers, who have the strongest need
for statutory overtime protection, toward higher-paid employees,
who generate larger back-pay amounts from which employment lawyers
can draw their fees. Simpler rules, by contrast, lower enforcement
costs and make it more practical for attorneys to accept cases
involving low-wage workers.
new white-collar regulations represent a substantial improvement
over the current rules: Relatively few workers are likely to lose
overtime protections because of the new rules, some will gain
overtime protections, and enforcement will become easier. Updated
white-collar exemption rules are already long overdue, and Congress
would do well to allow these rules to take effect without
modification and without further delay.
Paul Kersey is
Bradley Visiting Fellow in Labor Policy in the Thomas A. Roe
1. 29 U.S.C. §201 et
2. 29 U.S.C.
§213(a)(1).
3. The FLSA also provides
for the exemption of "outside sales" and "computer" employees. The
new regulations also cover these areas, but these provisions have
not yet generated as much interest or opposition as those
pertaining to executives, administrators, and professionals.
4. For the white-collar
exemption rules, see 29 C.F.R. §541.
5. Cynthia Fagnoni, Fair
Labor Standards Act: White-Collar Exemptions Need Adjustments for
Today's Work Place, U.S. General Accounting Office,
GAO/T-HEHS-00-105, May 3, 2000, at
www.gao.gov/new.items/he00105t.pdf (August 9, 2004).
6. Donovan v. Burger King
Corp., 672 F.2d 221 (1st Cir., 1982), and Donovan v. Burger King
Corp., 675 F.2d 516 (2nd Cir., 1982).
7. U.S. General Accounting
Office, Fair Labor Standards Act: White Collar Exemptions in the
Modern Workplace, GAO/HEHS-99-164, September 1999, p. 29.
8. For linotype operators,
see 29 C.F.R. §541.118(c). For "machine men" and "straw
bosses," see 29 C.F.R. §541.115(c)(2).
9. Hashop v. Rockwell
Space Operations, 867 F.Supp. 1287 (S.D.Tex., 1994).
10. 29 C.F.R.
§541.118(a)(5).
11. In Auer v. Robbins, 519
U.S. 452, 117 S. Ct. 905 (1997), the Supreme Court somewhat limited
the possible effects of incidental violations of the docking rules
but left open important questions regarding the docking rule that
are best resolved by DOL. U.S. General Accounting Office, Fair
Labor Standards Act: White Collar Exemptions in the Modern
Workplace, pp. 17-21.
12. Ron Gaswirth, "FLSA: An
Old Law That Can Cost Companies Millions," Texas Lawyer, Vol. 18,
No. 53 (March 3, 2003), p. 11.
13. Robert P. Davis, "Class
Actions Seeking Overtime or Other Pay Pose Issues of Complaint
Formality and Compliance with FLSA's `Opt-In' Feature," National
Law Journal, Vol. 23, No. 23 (January 29, 2001), and Mark Taylor,
"`No Overtime' Claims Lose Luster at Appellate Level," Texas
Lawyer, Vol. 20, No. 35 (October 28, 2002).
14. See Administrative
Office of the U.S. Courts, "Judicial Business of the U.S. Courts,"
annual reports, 1997-2003, Charts C-2 and X-5, at
www.uscourts.gov/judbususc/judbux.html (August 9, 2004).
15. For DOL's final
regulations, see 69 Fed. Reg. 22122-22274 (April 23, 2004).
Assuming they take effect, they will replace the current rules in
the Code of Federal Regulations (29 C.F.R. §541).
16. 69 Fed. Reg. 22123.
17. 29 C.F.R.
§541.1(f).
18. 69 Fed. Reg. 22261
(final rule 541.100).
19. 29 C.F.R.
§541.2(e)(2), §541,2(a)(1), and 69 Fed. Reg. 22262 (final
rule 541.200[a][2]).
20. 29 C.F.R.
§541.2(e)(2) and 69 Fed. Reg. 22262 (final rule
541.200[a][3]).
21. 69 Fed. Reg. 22263
(final rule 541.203[b]).
22. 69 Fed. Reg. 22264
(inspectors final rule 541.203[j]; educational institutions final
rule 541.204).
23. 69 Fed. Reg. 22263
(final rule 541.203[a]).
24. Jastremski v. Safeco
Insurance Co., 243 F.Supp. 2d. 743 (2003).
25. 29 C.F.R.
§541.3(e) and 69 Fed. Reg. 22265 (final rules 541.300 and
541.301).
26. This is a clarification
of a comment in the current rules. Compare 29 C.F.R.
§541.301(e)(2) and 69 Fed. Reg. 22266 (final rule
541.301[f]).
27. 29 C.F.R.
§541.118(a).
28. 69 Fed. Reg. 22270
(final rule 541.603).
29. 69 Fed. Reg. 22269
(final rule 541.601).
30. 69 Fed. Reg. 22172.
31. 69 Fed. Reg. 22272
(final rule 541.700[b]).
32. Ross Eisenbrey, "A
Closer Examination of the Department of Labor's Final Overtime
Regulations," Economic Policy Institute Viewpoints, May 20, 2004,
testimony presented before the Subcommittee on the Workforce,
Empowerment, and Government Programs, Committee on Small Business,
U.S. House of Representatives, May 20, 2004, at www.epinet.org/content.cfm/webfeatures_viewpoints_small_business
_overtime_testimony (July 23, 2004).
33. 29 C.F.R.
§541.103.
34. 69 Fed. Reg. 22265
(final rule 541.301[d]).
35. 29 C.F.R.
§541.301(d).
36. Eisenbrey, "A Closer
Examination of the Department of Labor's Final Overtime
37. 69 Fed. Reg. 22264
(final rule 541.203[c]).
With the exception of some piecemeal revisions, the Fair LaborStandards Act regulations have not been updated for 50 years. Newregulations, promulgated by the Department of Labor, will benefitboth employees and employers because they will be easier to followand enforce, thereby reducing the need for costly and unnecessarylitigation.