FLSA Regulations on Exempt Employees

New regulations on employee exemptions from overtime pay rules became effective on August 23, 2004. They specify how employees are to be correctly classified as "exempt" from the overtime provisions of the federal Fair Labor Standards Act.

These rules generated criticism from anti-business groups (the usual suspects) and unions are trying repeal them. We will monitor this and alert you to any changes.

The regulations include significant changes from the regulations employers have followed for the last 50 years and generally provide clearer guidance for employers on how to properly classify employees as exempt.

Check now make sure your organization is in compliance with the new rules.  Here are five things to do:

1. Evaluate each white-collar job. Your goal:  See that each employee's duties meet the revised definition of exempt employees.  If an employee’s status changed under the new rules, reclassify that employee.

2. Flag borderline employees who earn less than $23,660. Then judge whether your payroll costs are best controlled by simply raising their pay above the new $23,660 threshold to retain their exempt status (as long as they still meet the duties test).

3. Review employee job descriptions. Make sure they accurately reflect the work performed and skills required. One useful addition to every job description: a notice -- just under the job title -- that says: "This an (