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Overtime Overhaul?

Congress challenges proposed changes to overtime eligibility.

By Julie Monahan

Opinions expressed by Entrepreneur contributors are their own.

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

Under sweeping changes to the federal Fair Labor Standards Actproposed by the Bush administration, middle-income employees whomake more than $65,000 per year would no longer be eligible forovertime, while low-income workers with annual wages up to $22,100would qualify for overtime for the first time. Current lawguarantees overtime only for workers making less than $8,060 peryear. The proposed rules would also give employers more flexibilityto reclassify workers making between $22,000 and $65,000 intoprofessional, administrative or executive categories that areovertime-exempt.

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