US Department of Labor updates the Fair Labor Standards Act (FLSA)

The Department of Labor revised the regulations that exempt executive, administrative, professional and outside sales employees from the FLSA's overtime pay requirements, the so-called "white-collar" exemptions.  New regulations are effective August 23rd, 2004. 

Regulations use a two part test to determine whether an employee is exempt from the overtime pay requirements.  Rules say "white collar" employees are not eligible for overtime pay if they: 1)  perform certain defined job duties, and 2)  are paid a guaranteed salary that exceeds a specified minimum amount and that cannot be reduced because of variations in quality or quantity of work produced or hours worked.

A major change  in the new rules was a significant increase in the minimum salary threshold.  To qualify for the white-collar exemption, employees must be paid at least $455 per week (or $23,660 annually) on a salary basis. 

Regulations also add a new type of exempt employee:  the highly compensated worker - an employee who performs office or non-manual work earning total annual compensation of $100,000 or more and who customarily performs at least one of the 'white collar' exempt job duties.  Carpenters, electricians, mechanics, construction workers, laborers / 'blue collar' workers are non exempt.

The Department of Labor established new rules and safeguards regarding an employer's ability to dock an exempt employee's pay without losing the exemption.  Employers can now give an exempt employee an unpaid disciplinary suspension of one or more full days for violations of written workplace conduct rules.  Also, the DOL established a 'safe harbor' for employers that protects them from the effects of improper deductions. 

State wage and hours law remain unchanged.  Wisconsin employers must comply with two sets of regulations. 

For more information check the US Department of Labor website at http://www.dol.gov/ and click on "fair pay overtime rules" or call 1-866-4US-WAGE.