ICBA - Publications - New Overtime Rules Issued

New Overtime Rules Issued

APRIL 23, 2004


New Overtime Rules Issued

The Labor Department issued final rules this week updating the Fair Labor Standards Act. Under the revised rules, workers earning more than $100,000 are generally ineligible for overtime, while workers earning less than $23,660 are guaranteed overtime. The new rules make it easier to classify workers as administrators or professionals, exempting them from the overtime requirements.

Numerous examples are provided of jobs generally considered exempt. For instance, a financial services employee is generally exempt if the employee's duties include analyzing customers' financial data, determining which financial products best meet a customer's needs and circumstances, advising customers on advantages and disadvantages of different products, or marketing, servicing or promoting the employer's financial products. However, an employee whose primary duty is selling financial products does not qualify for the administrative exemption.

ICBA had urged adoption of these changes, as the 50-year old wage and hour rules and salary level tests were woefully outdated. We specifically urged changes that would treat loan officers, who have a high level of skill and advise customers, as exempt. Other jobs considered exempt include human resource managers, management consultants, executive and administrative assistants, and insurance claims adjusters. Professionals (e.g., accountants and lawyers) as well as executives and outside sales professionals will continue to be exempt. However, accounting clerks and bookkeepers, who perform a great deal of routine work, are generally not exempt.

Certain computer employees paid at least $455 per week ($27.63 per hour) are exempt depending on their specific duties. The new overtime rules will go into effect 120 days from their publication date.