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NEW OVERTIME RULES (and a recent OT court decision)
By Sam Boyer
On April 23, 2004 the U.S. Labor Department published its regulations
that outline the new federal overtime law. These updated provisions
identify which white-collar employees are "exempt" (not eligible
for overtime) and which are "nonexempt" (eligible for overtime).
I have summarized from the U.S. Labor Department's website (www.dol.gov/esa)
those sections that could have an impact on beer distributors. The revised
regulations clarify both the "salary test" and the "duties
test" that is used to determine an employee's exempt status. The new
regulations are scheduled to take effect on August 23, 2004.
THE SALARY TEST:
Employees who are paid on a salary basis and earn less than $455 per
week ($23,600 annually) automatically qualify for overtime pay.
THE DUTIES TESTS:
Employees who meet the above salary test (paid in excess of $23,600
annually) must also meet the duties test to be exempt from overtime pay as
an executive, administrative, computer, professional, or outside sales
employee. To qualify for exemption an employee must meet tests regarding
their duties. Job titles do not determine exempt or non-exempt status.
There are five categories for the duties test.
Executive Exemption:
To qualify for the executive exemption all of the following tests must
be met:
 | The employee must be compensated on a salary basis of more than $455
per week. |
| The employee's primary duties must be concentrated on managing the
operation, or a portion of the operation. |
| The employee must on a regular basis direct the work of at least two
employees. |
The employee must have the authority to hire, fire, and promote other
employees.
Administrative Exemption:
To qualify for the administrative exemption all of the following tests
must be met:
| The employee must be compensated on a salary basis of more than $455
per week. |
| The employee's primary duties must be the performance of office or
non-manual tasks or the management of general business operations. |
| The employee's primary duties must allow for the exercise of
discretion and independent judgment concerning matters of
significance. |
Professional Exemption:
To qualify for the professional exemption all of the following tests
must be met:
| The employee must be compensated on a salary basis of more than $455
per week. |
| The employee's primary duties must be the performance of work
requiring advanced knowledge, is intellectual in character, and
includes the exercise of discretion and judgment. |
| The advanced knowledge must be in a field of science or learning. |
| The advanced knowledge must be acquired by a prolonged course of
special instruction. |
Computer Exemption:
To qualify for the computer employee exemption all of the following
tests must be met:
| The employee must be compensated on an annual salary basis of at
least $455 per week, or on an hourly basis of not less than $27.63 an
hour. |
| The employee must be employed as a computer systems analyst,
computer programmer, or similarly skilled worker in the computer
field. |
| The employee's duties must include the application of systems
analysis techniques, determination of hardware and software needs, and
the documentation, testing, and modification of computer programs. |
Outside Sales Exemption:
To qualify for the outside sales exemption all of the following tests
must be met:
| The employee's primary duties must be making sales or obtaining
orders. |
| The employee must be customarily and regularly engaged away from the
employer's place of business. |
The salary requirements do not apply to the outside sales exemption.
The outside sales exemption does not apply to tel-sell sales positions.
(See the administrative exemption above)
Exemptions do not apply to "blue-collar" workers. The above
exemptions apply only to "white-collar" workers. Employees that
perform work involving repetitive operations (warehousing) with their
hands and/or physical skills are not exempt from overtime regulations.
Should you as a beer distributor have particular concerns about your
compliance to these new regulations it is highly recommended you confer
with your legal advisor. You may also have requirements that are placed
upon you by the state in which you operate.
Delivery Truck Driver Exemption: (not part of the FSLA website)
Granting summary judgment to I.H. Caffey Distributing Co. (a North
Carolina beer distributor) on the FSLA …..Judge William L. Osteen…..found
the employer exempt from the FLSA's overtime requirements under the Motor
Carrier Act. (In regard to a truck driver who delivers beer) (Talton v.
I.H. Caffey Distributing Co., M.D.N.C., No. 1:02CV1048, 4/16/04)
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