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New Rules for Overtime Pay

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On Monday, new rules for receiving overtime pay went into effect, setting the maximum eligible salary level at $455 per week (that's $23,660 per year, see Matt Quinn's story for more details). That's a steep hike from the previous $155 per week maximum, making it seem like a good thing for workers.

However, as the onslaught of opponents to the new rules point out, there is also now more leeway for employers to restructure who is eligible and who is not, making it a bad thing for workers. In this sense, good for small business owners with revenues over $500,000 (the minimum amount to qualify). Bad for his or her employees.

USA Today's Steve Strauss, who says he "usually sides with the entrepreneur," thinks the
update to the Fair Labor Standards Act leaves too many employees out in the cold and enumerates them wistfully in a list that includes managers, computer-related jobs, some sales positions and, my favorite, those "whose job requires imagination" (I, for one, say "here, here" to that -- why shouldn't my daily half-hour subway rides, during which I plan out the new features on Inc.com, count as overtime pay? I've done some of my most productive thinking on those trips).

The rules also explicitly state that doctors, teachers and lawyers no longer qualify for overtime pay (not sure why lawyers would need "overtime" and how that would be billed, but that's another topic for another posting), despite their commonly known punishing work schedules.

So, what's the consensus? Are the new rules good for your business or not?
And what about the psychic impact on employees? How do you implement the new standards without negatively impacting morale?

Last updated: Aug 24, 2004




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