November 2004 Editorial

The Voice of Business, Industry & the Professions Since 1942
North Carolina's largest business group proudly serves as the state chamber of commerce

November 2004 Editorial

Overtime Pay
It once was easy to know the difference between white collar and blue collar jobs, and thus who on the payroll was eligible for overtime pay. If you worked in the factory you got time-and-a-half after 40 hours. Everybody else was white collar whose paychecks didn’t increase if they worked late to finish a project.

But those old rules went out the window a few weeks ago when the U.S. Department of Labor began enforcing the much debated but little understood revisions to the Fair Labor Standards Act. Labor unions say the new rules are a veiled attempt to deny overtime to millions of low-income workers. The Bush Administration claims the rules will strengthen the overtime rights of 6.7 million Americans. Even labor law experts can’t agree unanimously which side is right.

The few hours I spent reading up on the subject at the U.S. Department of Labor’s web site only added to my confusion. But one thing is clear: job titles alone now are meaningless in deciding who gets overtime, particularly at the lower rungs of management. Consider this three-part test that DOL says you can use to decide if your secretary is management or labor:

The employee must be paid on a salary or fee basis at a rate not less than $23,660 a year or $455 a week;

The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and

The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Does what mean you must begin paying overtime to the administrative assistants at your company, even though they may be salaried and work in comfortable office surroundings? Apparently so if their primary duty is running the copier machine and performing other routine administrative functions that don’t require “independent judgment with respect to matters of significance.”

Other thorny questions arise for outside sales people and computer technicians.

The best advice we can offer business people is to hire a good lawyer who’s up to speed on the new FLSA regulations. NCCBI also is offering a series of seminars across the state this fall on workplace law issues, including FLSA. There will be four offered this month, on Nov. 9 in Charlotte, Nov. 10 in Asheville, Nov. 18 in Wrightsville Beach and Nov. 19 in Greenville.

Ask you secretary to get you registered for one of the seminars, which you can do online through the NCCBI website. Handling that may qualify as a matter of significance. -- Steve Tuttle

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