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May 21, 2004
New Overtime Regs Confuse Some States

Officials, employers, and employees in 18 states where the federal government's new overtime regulations will not be automatically adopted are asking what the federal government's new overtime rules mean in their states, the Associated Press reports.

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Some of those states will require administrative or legislative action in order to change the overtime rules, some of which are virtually identical to federal rules, the news service notes.

"We're in a wait-and-see mode," says John Andrew, chief of the Labor Standards Bureau in Montana's Labor and Industry Department.

When state wage and hour rules conflict with federal rules, the stricter rules apply.

In the end, employers in some states may be forced to comply with different sets of rules, depending on which ones are more generous to workers, according to Camille Olson, an employment attorney with Seyfarth Shaw.

Some of the federal government's changes will give overtime eligibility to workers not currently eligible. Other federal changes are expected to take away overtime from some workers currently eligible for it.

The Labor Department's final regulations become effective on August 23, 2004. The rules alter the tests for exemptions and boost the salary threshold below which workers would generally be guaranteed overtime from $8,060 to $23,660. The Labor Department estimates that this change will give more than 1 million workers overtime eligibility.

The department estimates about 100,000 workers will lose overtime under other changes, the news service notes. Critics say the number will be much larger.

On August 23, the rules will be effective automatically in 32 states and the District of Columbia, according to an analysis by Seyfarth Shaw.

According to the news service, states where the new rules will not become automatically effective include Alaska, Arkansas, California, Colorado, Connecticut, Hawaii, Illinois, Kentucky, Maryland, Minnesota, Montana, North Dakota, New Jersey, Oregon, Pennsylvania, Washington, Wisconsin, and West Virginia.

Illinois preempted the federal government in April when the state passed legislation that bypassed federal rules. The news service notes that the Illinois law will keep the definitions of professional, administrative, and executive as they were in March 2003.


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