Employers Required to Implement New Department of Labor Regulations

August 23, 2004 (Oklahoma City) - New Federal regulations take effect today for employers across the nation. The United States Department of Labor issued its new "white collar" exemption regulations under the Fair Labor Standards Act ("FLSA") on April 20, 2004. The revisions regarding exemptions for minimum wage and overtime pay for Executive, Administrative, and Professional employees go into effect today.

"Employers must understand the impact of FLSA regulations because the financial penalties can be severe. Whether an employee is classified as "exempt" or "nonexempt" has been a gray issue for employers for a long time. While the determination of exemption status can be difficult for many employers, it is critical, stated Anne Zachritz, employment law attorney with Andrews Davis in Oklahoma City.

The new regulations redefine several "white collar" exemption regulations which have been in place, without major revisions, for over fifty years. The new regulations make a number of changes that will affect the FLSA classification of certain employees, changing some from "exempt" to "nonexempt," and others from "nonexempt" to "exempt."

Whether or not an employee is "exempt" or "nonexempt" determines whether or not they are entitled to overtime pay under the FLSA and state labor laws. The new regulations simplify the tests determining whether an employee meets the standards for exemption.

The "white collar" exemptions do not apply to manual laborers or other traditional blue-collar employees who are entitled to minimum wages and overtime premium payments under the FLSA, no matter how much they may be paid. "First responders," such as police officers, firefighters, paramedics and other "first responders" who are entitled to overtime pay regardless of rank or pay level, are similarly exempt.

Employee qualification for the Administrative exemption appears to be the most difficult evaluation for employers. The existing exemption has in the past been vague and it has resulted in a lot of litigation. "We have battled for our employer clients for many years", said Ms. Zachritz. "The last thing we want is for them to become involved in litigation over these regulations."

The new regulations should help employers clarify the scope of the exemptions. A significant change is that the standard for the Administrative exemption has been revised so that, among other things, the employee must "exercise discretion and independent judgment" "with respect to matters of significance" to be exempt under the Administrative exemption.

To ensure compliance with the new regulations, the single most important task for employers is to assess the job functions of their employees' job title, job duties (primary and otherwise), written job descriptions, and to correctly classify their employees as "exempt" or "nonexempt" under the "Executive," "Administrative," or "Professional" exemptions.

Penalties for failure to comply with the new regulations include damages in the amount of unpaid minimum wages or unpaid overtime compensation, as well as an additional equal amount as liquidated damages. Additionally, penalties of up to $1,000.00 may be assessed for repeated or willful violations.

About Andrews Davis

Based in Oklahoma City, Andrews Davis is a full-service business law firm with over six decades of experience serving local, national, and international clients. With excellence and integrity, Andrews Davis is a solution-oriented business partner, responsive to the legal needs of their clients. The firm is known for its professional and effective legal advice and its accountability for that advice.

Contact Andrews Davis today at (405) 272-9241 for a complete understanding of the new FLSA regulations and their impact on your business. For more information about Andrews Davis, please visit the web site at www.andrewsdavis.com.

Legal Notice

As an important note, this press release is not intended to be legal advice. It is for informational purposes only and should not be relied upon as legal advice. Please contact your legal counsel for legal opinions.