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White-collar OT rules are far from definitive

Published April 21, 2004

Overtime is such a hot employment issue that some lawyers are working, well, overtime. Consider these three Florida examples:

Pharmacists, current and former photo lab managers and assistant store managers of the Eckerd drugstore chain have filed class-action lawsuits claiming the Largo company illegally denied them overtime.

Employees of the Professional Association of Golf Officials filed suit against the PGA Tour because they say they are owed overtime. But the PGA Tour argues the tour officials are salaried and ineligible for extra pay.

Former seminude residents of the Tampa home that appears on the Internet in Voyeur Dorm sued the Web site operator of alleging they are owed extra money because their online appearances exceeded a 40-hour work week.

Will the drumbeat of litigation over employee overtime ease at all now that the Bush administration on Tuesday formally revised the country's antiquated overtime pay regulations?

Portions of the new rules for white-collar workers are still vague. The rules should encourage businesses to reassess their own overtime practices, and employees to recheck their own eligibility for time and a half. But the rules probably still will not slow the lawsuits.

"Hopefully, the new regulations will be less confusing, but I am not optimistic they will reduce the volume of litigation," said St. Petersburg labor and employment lawyer Phyllis J. Towzey.

The new Department of Labor rules guarantee overtime pay to 1.3-million workers making less than $23,660 a year. Before, only workers earning less than $8,060 annually were guaranteed OT. The rules also raise to $100,000, from $65,000, the maximum pay to qualify for time and a half, though many employees may continue to be ineligible based on their job descriptions.

Overtime is a big concern for two reasons: Cost-obsessed companies want to minimize their labor expenses even as many workers are working longer hours. While the average work week in the past 20 years has increased by just over 11/2 hours, the proportion of people who work longer weeks - more than 48 hours - has increased sharply, according to the Bureau of Labor Statistics.

That makes for a growing supply of workers who are eligible (or think they are eligible) for overtime under rather fuzzy federal rules. Towzey says many companies will need to review which of their workers are exempt and which are not exempt from the new regulations.

For nonexempt workers, it's simple. They are due overtime pay if they work more than 40 hours in a week. But deciding which employees - especially those earning between $23,660 and $100,000 a year - fall under that classification is tougher.

For example, "professional" workers such as doctors, lawyers and CPAs are not subject to overtime. Neither are "executives" who supervise and manage. But classifying "administrative" workers can get tricky. Consider a salaried worker with the title of "office manager" who may appear exempt from overtime, but whose job involves more filing and bill paying than actual management. That worker may very well be eligible for overtime.

"Overall," Towzey says, "the new rules help. They solve twice as many old problems as the new problems they create." That's not bad in the federal rulemaking world.

The issue of labor and pay goes back to the late 1930s and the Fair Labor Standards Act. The act set overtime rules for certain workers. But the act was also crafted to get Depression-era people back to work by informing businesses who they would not have to pay overtime.

The new overtime rules were announced in Washington on Tuesday by Labor Secretary Elaine Chao. Her pitch? "We are restoring overtime to what it was intended to be: fair pay for workers, instead of a lawsuit lottery."

Chao knows firsthand of what she speaks. Before serving as the Bush administration's labor secretary, Chao was a director of Raymond James Financial, the St. Petersburg securities firm. In 1998, the year Chao joined the board, Raymond James was busy settling overtime pay lawsuits that covered sales assistants nationwide.

- Robert Trigaux can be reached at or 727 893-8405.

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