Overtime Rule Changes Impact Banks
by Mary Beth Guard, BOL Guru
Looking for information about the new "FairPay" regulations that took effect August 23, 2004? The Department of Labor has done a commendable job of delivering all the details on a special FairPay Web page. On that Web page, you can view an online video seminar, access the regulations, and read a Fact Sheet on how the new rules apply to financial services industry employees.
The basic premise of the overtime requirements in the U.S. is that most employees must be paid at least the federal minimum wage for the hours they work and, to the extent they work over 40 hours in a workweek, they must be paid at a rate of time and one-half their regular rate of pay for those "overtime" hours. There are exemptions, however, for employees who fall within the realm of executive, administrative, professional, or outside sales employees, and even certain computer employees.
There are two main tests to determine whether an employee qualifies for exemption:
The employee's job duties must meet certain standards; and
The employee must be paid on a salary basis at not less than $455 per week.
If an individual is paid on a salary basis and his/her compensation is less than $455 week, an exemption will not be applicable, regardless of the duties, and the employee would be eligible for overtime benefits..
In addition to meeting the salary test, in order for a financial services industry employee to potentially qualify for an exemption from overtime, the employee's primary duty must be the performance of office or non-manual work that is directly related to the management or business operations of the employer or the employer's customers, and the employee's primary duty must include the exercise of discretion and independent judgment with respect to matters of significance. Read that language slowly. Each word and phrase is important to the test.
Fortunately, examples provided by the Department of Labor help illustrate how the tests apply. If an employee in the financial services industry meets the salary test and the employee's duties include work such as the following, the individual will be considered exempt, and thus not entitled to overtime pay:
collecting and analyzing information regarding the customer's income, assets, investments or debts;
determining which financial products best meet the customer's needs and financial circumstances;
advising the customer regarding the advantages and disadvantages of different financial products;
marketing, servicing or promoting the employer's financial products.
An employee whose primary duty involves selling financial products does not qualify for an administrative exemption.
Your roster of "exempt" employees should be reviewed and adjusted in light of these new rules.
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