New overtime rules go into effect

New overtime rules instituted by the U.S. Department of Labor could affect your next payroll. The rules, known as the “Fair Pay Initiative,” went into effect Aug. 23 and make workers earning less than $23,660 automatically eligible for overtime pay, increasing the previous pay ceiling from $8,060.

According to critics of the new rules, 1.3 million workers will be newly eligible for overtime pay, but approximately 6 million employees will lose their eligibility.

The rules make workers who have supervising job titles or duties ineligible for overtime. Employees who manage a business, direct at least two other employees and have hiring and firing responsibilities would be considered exempt from overtime. A worker who holds a large amount of responsibility and has an impact on the operation or finances of the company is also ineligible. Construction workers who have a supervising role and who have the power to instruct other workers may no longer be eligible. It is up to each individual company to determine who can or cannot receive overtime.

The new rule also changes the definition of a “learned professional.” Under the previous rules, any job that required an advanced degree was exempt. Under the current rules, however, workers who acquired skills at technical schools, community colleges and in the military could be classified as learned professionals.

Most hourly employees, and construction workers who are currently working under a union contract, are still eligible for overtime pay. The Associated Builders and Contractors encourages its members and other contractors to review their job descriptions and seek legal counsel regarding changes to status.

Presidential candidate John Kerry has repeatedly denounced the new overtime rules and said he will repeal them if elected. His running mate, Sen. John Edwards, agrees.

“If you work hard, then you should be rewarded for that effort,” Edwards said during a weekly radio address. “Why would anyone support this new rule, which could mean a pay cut for millions of Americans who have already seen their real wages drop again this year?”

Republicans say the previous overtime rules were outdated. Every presidential administration since the 1970s has attempted to revise the rules.

To find out more about the overtime rules, click on the link to the right.