New regulations could change overtime pay

New changes made by the George W. Bush administration to the regulations in the Fair Labor Standards Act are affecting workers all across the nation, and IU employees are no exception.\nThe FLSA establishes minimum wage, overtime pay, record keeping and child labor standards affecting full-time and part-time workers in the private sector as well as in federal, state and local governments.\nSpecifically, the new regulations change who is eligible for overtime pay and who isn't. In order to determine eligibility, three tests must be met. \nAccording to the salary basis test, each employee must be paid a predetermined, fixed salary that is not subject to restrictions based on the quality or quantity of work done. In the former regulation, the salary level test was satisfied if an employee made $155 a week, or $8,060 a year. Then he or she was eligible for overtime pay. Now the threshold is $455 a week, or $23,660 a year. The duties test states which types of jobs receive exemptions. \nDan Rives, associate vice president for University Human Resources, said IU, along with most Big Ten schools, is likely to see some positions become eligible for overtime as result of the new FLSA regulations.\n"Like many employers, they look at the new salary-level test that is now $455 a week. There are some part-time employees who do not meet that test who are currently exempt from overtime (that) the new FLSA regulations will require institutions to make positions eligible for overtime in the event they work over 40 hours in a work week," he said. "Outside those three tests, the FLSA lists specific jobs for which companies cannot exempt from overtime." \nAccording to a memo Rives sent to deans, directors and department heads at IU, the University must take several steps in order to implement the new overtime pay. \nFirst, positions and employees that are potentially affected by the new FLSA must have been identified by mid August 2004. Next, records need to be kept of actual hours worked by these employees so they can receive back pay. Once the lists are completed by the departments, each department must write a short summary about the affected positions to see if they meet the final FLSA exemption status. Finally, those who would be covered by the FLSA would receive back pay for the overtime they worked back to Aug. 22, 2004. \nThe decisions will be made in early October as to which positions are eligible and which ones are not. \nKenneth Dau-Schmidt, Willard and Margaret Carr professor of labor and employment law, said the new FLSA regulations are going to bump more people off of coverage than it is going to add.\n"The people that (FLSA) now extends coverage to, the University is not going to want them to work overtime, and the people who are not covered by (FLSA), the University is going to want them to pick up the slack," Dau-Schmidt said.\n-- Contact senior writer Mike Malik at mjmalik@indiana.edu