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For low-wage workers, overtime may get more lucrative.

By Stephen Barlas

Opinions expressed by Entrepreneur contributors are their own.

In a balancing act worthy of a high-wire performer, the LaborDepartment has proposed changes to the law that dictates who getsovertime pay. The changes to the "white-collarexemptions" of the Fair Labor Standards Act would entitle morehourly employees to time and a half and clarify provisions thathave allowed salaried workers to sue employers for overtime.

There are two different sets of problems with the currentexemptions. First, the wage thresholds, last adjusted in 1975, areso low that even minimum-wage employees working 40-hour weeksqualify as "white-collar" workers who don't have tobe paid overtime. The department's proposed modifications wouldraise the salary threshold from $155 a week to $425 a week. Theimpact would be to increase the wages of 1.3 million lower-incomeworkers and reduce the number of low-wage salaried workerscurrently being denied overtime pay. While employers would have topay some workers more, they would be insulated against lawsuits forviolations of the complex "salary basis" test andso-called "no docking" rule. This test in effect limitsemployers' ability to "dock" exempt employees'pay for partial-day personal absences and disciplinaryviolations.

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