The Department of Labor (DOL) proposed to change the FLSA’s current regulations for the first time in many years. Under the salary test of the current regulations, workers earning less than $8,060 a year automatically qualify. Under the salary test of the proposed regulations, employees earning less than $22,100 a year would automatically qualify for overtime. As a result, there are many employees in lower management positions who earn less than $22, 100 per year, but qualify as exempt employees because they are managers, would no longer qualify because of the raised salary cap. Employee groups allege that these employees need to earn the overtime money to make ends meet.

In response, the Department of Labor (DOL) estimated that only 640,000 American workers would become exempt under the proposed regulations, but Democrats allege that the number is much higher and could be closer to eight million! They relied heavily on a study by the Economic Policy Institute, a liberal research group that faulted the administration's low estimates.

The objections came on the last day of the 90-day comment period and are likely to carry weight in Washington’s current political environment. In addition, there have been recent allegations by attorney groups alleging that the DOL may have exceeded its rulemaking authority by proposing such sweeping regulations.

At this time, proposed regulations (in the current or amended form) are expected to become final in early 2004. However, this week’s objections may push that date back. BLR will be following this story as it unfolds.