Michael D. Lore, P.C.
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MINIMUM WAGE INCREASE:
The FLSA was recently amended to increase the federal minimum wage in three steps: to $5.85 per hour effective July 24, 2007; to $6.55 per hour effective July 24, 2008; and to $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. Where an employee is subject to both the state and federal minimum wage laws, the employee is entitled to the higher minimum wage rate.
FAIR PAY RULES:
The Department of Labor (DOL) released the "FairPay" rules that went into effect on August 23, 2004. These overtime rules make some significant changes to the old rules and are intended to strengthen overtime protections and overtime rights for 6.7 million American workers, including 1.3 million low-wage workers who were denied overtime under the old rules.
Under the new FairPay rules, workers earning less than $23,660 per year or $455 per week are guaranteed overtime protection.
As before, mere job titles do not determine an employee's exempt or non-exempt status and entitlement to overtime pay. Under the new overtime rules, certain workers are automatically eligible for overtime pay regardless of how much they earn. The following categories or classes of workers are automatically eligible for overtime pay regardless of how much they earn:
The DOL chart below provides a side-by-side comparison of the applicable tests for Executive, Administrative, Professional, Computer and Outside Sales employees under the old overtime rules and the new overtime rules FairPay regulations:
Executive Employees
|
Short Test Before |
Standard Test Effective | |
|
Salary Level |
$250 per week |
$455 per week |
|
Duties |
Whose primary duty consists of the management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; and Includes the customary and regular direction of the work of two or more other employees therein. |
Whose primary duty is management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof; Who customarily and regularly directs the work of two or more other employees; and Who has the authority to hire or fire other employees or whose suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees are given particular weight. |
Administrative Employees
|
Short Test Before |
Standard Test Effective | |
|
Salary Level |
$250 per week |
$455 per week |
|
Duties |
Whose primary duty consists of the performance of office or non-manual work directly related to management policies or general business operations of the employer or the employers customers; and Which includes work requiring the exercise of discretion and independent judgment. |
Whose primary duty is the performance of office or non-manual work directly related to the management or general business operations of the employer or the employers customers; and Whose primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. |
Professional Employees
|
Short Test Before |
Standard Test Effective | |
|
Salary Level |
$250 per week |
$455 per week |
|
Duties |
Whose primary duty consists of the performance of work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study; and Which includes work requiring the consistent exercise of discretion and judgment; or Whose primary duty consists of the performance of work requiring invention, imagination, or talent in a recognized field of artistic endeavor. |
Whose primary duty is the performance of work requiring knowledge of an advanced type (defined as work which is predominantly intellectual in character, and which includes work requiring the consistent exercise of discretion and judgment) in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction; or Whose primary duty is the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor. |
Computer Employees
|
Short Test Before |
Standard Test Effective | |
|
Salary Level |
$250 per week or, if paid hourly, |
$455 per week or $27.63 an hour |
|
Duties |
Primary duty of performing work that requires theoretical and practical application of highly-specialized knowledge in computer systems analysis, programming, and software engineering, and employed and engaged in these activities as a computer systems analyst, computer programmer, software engineer, or other similarly skilled worker in the computer software field, as provided in § 541.303, which includes work requiring the consistent exercise of discretion and judgment. § 541.303(b): Whose primary duty consists of one or more of the following: |
Computer systems analysts, computer programmers, software engineers or other similarly skilled workers in the computer field are eligible for exemption, but only if the employees primary duty consists of: (1) The application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications; |
Outside Sales Employees
|
Short Test Before |
Standard Test Effective | |
|
Salary Level |
No minimum salary required |
No minimum salary required |
|
Duties |
Who is employed for the purpose of and who is customarily and regularly engaged away from the employers place or places of business in making sales; or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and Who does not devote more than 20 percent of the hours worked in the workweek by nonexempt employees of the employer to activities that are not incidental to and in conjunction with the employees own outside sales or solicitations. |
Whose primary duty is making sales or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and Who is customarily and regularly engaged away from the employers place or places of business in performing such primary duty. |
To learn more about the new overtime rules, you can contact us or visit the Department of Labors FairPay web site (these links will not cause you to leave this web site)
FairPay Home page: http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm
Frequently Asked Questions: http://www.dol.gov/esa/regs/compliance/whd/fairpay/faq_PF.htm