New Overtime Legislation Bill Passes in the House
On Friday, the House of Representatives voted 213-210 to move forward with the Bush administration's proposal to change federal overtime rules.
Democrats and labor groups have shunned the legislation, claiming as many as 8 million workers will no longer qualify for overtime compensation should the new rules become law. Friday's close vote, had it passed, would have blocked the overtime legislation.
The Bush administration, on the other hand, describes how the legislation will add 1.3 million lower income workers to the overtime rosters if they log more than 40 hours per week. Proponents of the bill, including members of the U.S. Department of Labor, say that only about 644,000 white collar workers will lose their ability to get overtime should the measure become law.
The proposed legislation would raise the salary threshold below which workers would automatically qualify for overtime. The current threshold under the Fair Labor Standards Act (FLSA) is $155 a week. Workers that earn more than that threshold are described as white collar employees and are not entitled to overtime pay. New rules would amend the Act to change the threshold to $425 a week, which would open overtime opportunities to 1.3 million workers.
The proposed changes would eliminate overtime pay for anyone making at least $65,000 per year. Certain employees who are classified as managers, administrative workers, or professionals, would not qualify for overtime pay. The DOL states that the proposed duties tests will make entitlement to overtime more certain for 10.7 million workers.
The Department of Labor is promoting the changes on its Web site, claiming that the proposal "will strengthen overtime for the most vulnerable low-wage workers and allow for stronger Department of Labor enforcement of this important worker protection."
The existing regulations under the FLSA were written in 1949, and they make reference to job titles that no longer exist, such as keypunch operators, straw bosses, leg men, and gang leaders. The new act will clarify which types of jobs qualify for overtime.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.