FLSA Regulations Governing Exemptions from the Statute's Overtime Rules May Be Derailed

May 2004

The new FLSA Regulations governing exemptions from the statute's overtime rules, which we reported on in our April 27 Client Advisory, may be derailed prior to their taking effect on August 23. Senator Tom Harkin (D-IA) has attempted to amend several pieces of unrelated legislation to include a provision limiting the Labor Secretary's ability to make changes to the overtime eligibility rules. On May 4, the United States Senate passed an amendment offered by Harkin and sponsored by Senators Kennedy, Sarbanes, Kerry, and Mikulski, which provides:

Section 13 of the Fair Labor Standards Act of 1938 (29 U.S.C. 213) is amended by adding at the end the following:

``(k)(1) The Secretary shall not promulgate any rule under subsection (a)(1) that exempts from the overtime pay provisions of section 7 any employee who would not be exempt under regulations in effect on March 31, 2003.

``(2) Any portion of a rule promulgated under subsection (a)(1) after March 31, 2003, that exempts from the overtime pay provisions of section 7 any employee who would not otherwise be exempt if the regulations in effect on March 31, 2003, remained in effect, shall have no force or effect.''.

While no one is certain how the amendment will impact the recently published Regulations, the general opinion is that the amendment would seriously limit their effect and further complicate enforcement of an already complex law. Increased complexity will mean increased cost and litigation for employers.

For the amendment to become law, the bill carrying the amendment, an import tax bill, must now be approved by the House and signed by the President. Secretary of Labor Chao has issued a statement criticizing the amendment and stating that it will put at risk the new, stronger overtime protections for millions of American workers.

We will keep you informed of the progress of this amendment and any other information related to the new Regulations. If you have questions about the new FLSA Regulations or any labor or employment issues please contact any member of our Labor and Employment Department.

Frost Brown Todd had planned to present a breakfast program addressing the newly released Regulations later this month. However, we may delay the program until the fate of the Harkin amendment becomes clear.

We are also considering a half-day program that would include topics like hiring, terminations, and FMLA. We would charge a registration fee for this type of half-day program.

If you are interested in attending a program on these topics, please let us know by sending an e-mail to: labortraining@fbtlaw.com. Tell us if you are interested in the breakfast covering only the new Regulations and/or the half-day program covering a variety of topics.