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Overtime Overhaul?

Congress challenges proposed changes to overtime eligibility.

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This story appears in the December 2003 issue of Entrepreneur. Subscribe »

Proposed regulatory re- lief from paying overtime may sound good for the expense side of the income statement. But hidden costs may be lurking in higher turnover, rankled employees and even an increase in overtime outlays for some businesses.

Under sweeping changes to the federal Fair Labor Standards Act proposed by the Bush administration, middle-income employees who make more than $65,000 per year would no longer be eligible for overtime, while low-income workers with annual wages up to $22,100 would qualify for overtime for the first time. Current law guarantees overtime only for workers making less than $8,060 per year. The proposed rules would also give employers more flexibility to reclassify workers making between $22,000 and $65,000 into professional, administrative or executive categories that are overtime-exempt.

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