New Overtime Regulations from the U.S. Department of Labor Fair Labor Standards Act

We at Special Counsel are always on the lookout for items of interest to our clients, regarding both the legal marketplace and staffing in general. One current issue that may impact our industry is the new U.S. Department of Labor’s Fair Labor Standards Act (“FLSA”) overtime “white collar” regulations. We are happy to share the information below and hope it is both beneficial and informative.

The new regulations went into effect on August 23, 2004. The changes to the regulations are intended to update the standards used to determine whether “white collar” employees are exempt from the overtime requirements of the FLSA. Under the FLSA, an employee may qualify for exemption if the tests relating to salary and job duties are met. In addition to increasing the minimum salary level below which employees are entitled to overtime pay to $455 a week ($23,660 annually), the new regulations also revise the duties test of the executive, administrative, and professional exemptions.

The new rules also provide that paralegals and legal assistants generally are not considered exempt professionals. Section 541.301(e)(7) states that paralegals and legal assistants generally do not qualify as exempt unless they hold advanced specialized degrees in other professional fields and use that advanced knowledge in the performance of their duties. The section concerning paralegals and legal assistants, 29 C.F.R. Section 541.301(e)(7), reads as follows:

Paralegals and legal assistants generally do not qualify as exempt learned professionals because an advanced specialized academic degree is not a standard prerequisite for entry into the field. Although many paralegals possess general four-year advanced degrees, most specialized paralegal programs are two-year associate degree programs from a community college or equivalent institution. However, the learned professional exemption is available for paralegals who possess advanced specialized degrees in other professional fields and apply advanced knowledge in that field in the performance of their duties. For example, if a law firm hires an engineer as a paralegal to provide expert advice on product liability cases or to assist on patent matters, that engineer would qualify for exemption.

You may find a copy of the final rules on the Department of Labor’s web site at www.dol.gov/fairpay. Please also reviewyour state’s wage and hour laws as employers must consider the standards most protective to employees.

This communication is provided for general informational purposes only, and should not be construed as legal advice or a legal opinion. You should consult legal counsel of your choice to discuss your specific facts and circumstances, or for answers to any specific legal questions you may have.