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April 23, 2004
OT Rules Effective August 23

The Labor Department has published final rules governing the eligibility for overtime in the Federal Register. The department says employers have until August 23, 2004, to bring their companies into compliance with the new regulations.

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The new rules cover the white-collar exemptions of the Fair Labor Standards Act. The rules raise the salary threshold below which employees are generally guaranteed overtime to $23,660, up from the $8,060 under current rules and up from the $21,000 proposed in the initial draft of the rules.

The new rules also create an exemption for "highly compensated" employees who customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee. The threshold for this exemption is $100,000, up from the $65,000 threshold proposed in March 2003.

The new rules also state that police officers, firefighters, paramedics, and other so-called "first responders" are entitled to overtime pay. When the Labor Department announced its proposal in March 2003, there was no such language and some of these workers were concerned that their right to overtime was in jeopardy.

Democrats and labor groups say they continue to oppose the rules even though the Bush administration scaled back its plan after receiving heavy criticism. They contend too many workers will lose overtime pay.

In general, business groups have supported the changes. Employers contend the rules clarify who is eligible for overtime and will reduce the number of lawsuits over overtime.


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