Changes to Federal Overtime Regaulations and Self Audit

MEMORANDUM June 21, 2004 To: Deans, Directors, and Department Heads From: Grace C. Karmiol, Director, HR Policy & Regulatory Affairs Subject: Changes to Federal Overtime Regulations and Self Audit Over the last several months, you may have heard or read news coverage regarding changes to federal overtime regulations by the Department of Labor. If you have been following these stories, you may have wondered how these changes may impact you or your department. Outlined below is background information on overtime regulations, a description of changes, and the measures American University is taking to ensure compliance with the new rules. Background The Fair Labor Standards Act (FLSA) requires that employers pay all employees at a rate of 1 ½ times their regular rate of pay for each hour over 40 hours worked in a given week unless the employee holds a position designated as exempt. The FLSA exempts from overtime requirements “any employee employed in a bona fide executive, administrative, or professional capacity.” While the FLSA does not provide any definition of these terms, it states that they should be “defined and delimited from time to time by regulations” of the Department of Labor. The Department of Labor long ago established both salary tests and duties tests in order to determine if a particular position could be deemed ...