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ESA News Release: [03/27/2003]
Contact Name: Yvonne Ralsky
Phone Number: (202) 693-4676

U.S. Department of Labor Proposal Will Secure Overtime for 1.3 Million More Low-Wage Workers

Department Seeks to Modernize 50-Year-Old Wage Regulations

WASHINGTON—The U.S. Department of Labor today published a proposal to modernize its 50-year-old regulations defining exemptions from the Fair Labor Standards Act (FLSA) for “white-collar” employees, a measure that will help small businesses grow and guarantee overtime pay for 1.3 million more low-wage workers.

“Our proposal will strengthen overtime for the most vulnerable low-wage workers and allow for stronger Department of Labor enforcement of this important worker protection,” said U.S. Secretary of Labor Elaine L. Chao.

For the first time since 1975, the Department’s proposed regulations would raise the salary threshold—below which workers would automatically qualify for overtime—from $155 a week to $425 a week. This increase of $270 a week would be the largest since Congress passed the FLSA in 1938. The impact of this revision will be to increase the wages of 1.3 million lower-income workers and reduce the number of low-wage salaried workers currently being denied overtime pay.

Other proposed changes include revising job duties required to qualify for the exemption to better correspond to 21^st century workplace realities. The old regulations, written in 1949, mention job classifications that no longer exist, such as key punch operators, straw bosses, leg men and gang leaders. Clarifying which job duties qualify for overtime pay will help workers and employers easily determine overtime entitlement for millions of workers whose status is currently unclear.

“Updating these regulations is long overdue—the types of jobs people do and the skills they need have changed, but the regulations have not,” said Wage and Hour Administrator Tammy D. McCutchen. “By recognizing the professional status of skilled employees, the proposed regulation will provide them a guaranteed salary and flexible hours.”

The department invites comment on the Notice of Proposed Rulemaking that will be published in the Federal Register on Monday, March 31, 2003.

For further information about the Fair Labor Standards Act and the proposed regulations, visit the Wage and Hour Division’s web page at www.wagehour.dol.gov.

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