Department of Labor Changes White-Collar Overtime Exemptions

Abstract

The Department of Labor (DOL) issued its final “fair pay” rules that overhaul the overtime exemptions for white-collar employees, such as executive, administrative, professional, computer and outside sales employees, on April 23, 2004. This is the first time since the Fair Labor Standards Act became law in 1938 that the DOL has completely reviewed and modernized the exemptions. The changes to the rules have been hotly debated, but legislative attempts to block them over the past year have failed. However, the final rules reflect compromise and seem less controversial than the DOL’s original proposal last year. The rules are effective August 23, 2004. This article describes the major changes to the rules and provides action steps for employers.