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Front Page » Top Stories » Laborlaw Changes Might Be Costly To Some Professionals

Laborlaw Changes Might Be Costly To Some Professionals

Written by on September 2, 2004

By Claudio Mendonca
More professionals graduating from four-year colleges will be ineligible for overtime pay under recent changes in federal regulations, some local labor law attorneys say.

"Most employers are going to need to review their workforce and determine how this law affects them," says Melanie Damian, a labor attorney with Damian & Valori in Miami. "Employers need to examine their workforce and check on who is exempt of overtime."

One example of what some call a discrepancy in the revisions regards hotel and restaurant chefs. Under new laws, a chef with a four-year culinary degree is unlikely to qualify for overtime but a cook at a diner is eligible.

A similar example may be encountered by registered nurses. Those with four-year degrees are considered exempt from overtime pay, but nurses with two-year degrees can receive it. Professional exemptions also apply to lawyers, doctors and accountants earning $23,600 to $100,000.

The changes, effective Aug. 23, come 50 years after creation of the Fair Labor Standards Act, which deals with minimum pay and overtime laws in the US.

The alterations in labor laws are the federal government’s response to the high number of litigation cases between employers and employees, attorneys say.

"There has been so much litigation in the past few years that the purpose of these new laws is to give security to employees and employers as to what their rights are," says Ms. Damian.

Despite the effort to reduce disagreements between companies and their workers, some local labor attorneys don’t think the changes will reduce the number of lawsuits and they say impasses will remain. The biggest problems, they say, are in trying to interpret obscure legislation.

"It won’t be until we have some court decisions on this regulation until we know what will be its actual effect," says Ms. Damian.

"At first, these changes are not going to cause much of an impact," says Bob Turk, labor attorney with Stearns, Weaver, Miller, Weisler, Alhadeff & Sitterson in Miami. "There are some points which are kind of vague and [that] is going to generate lots of lawsuits. Whether changes will result in less litigation is uncertain, since ambiguities persist."

Mr. Turk said many types of local businesses, from hotels to health care firms, are inquiring about the recent changes in the law.

"There has been a lot of confusion on the part of employers in light of the hype that has been going around," he said

"These ‘nip-and-tuck’ changes will have little, if any, effect on the number of lawsuits that are being filed and will do little to allay the uncertainty of employers struggling to comply with a Depression-era law in a 21st Century workplace," said Mr. Turk.

One local attorney who approves of the changes is Susan Eisenberg, an employment lawyer at Akerman & Senterfitt in Miami.

"The changes clarified a lot of issues," said Ms. Eisenberg. "We now have a definition that lacked from previous regulation."

Like other attorneys, though, Ms. Eisenberg said she doesn’t see an end to litigation, because the revised regulations can open new disputes.

Mr. Damian said questions about the exemption from overtime pay often occur in the restaurant and retail industries.

Usually these businesses have employees who, though, called "managers," don’t have decision-making authority.

"Let’s say the manager of a nationwide retailer might have some duties in his store but most of the decisions might be made at a corporate level," says Ms. Damian. "Lots of times, managers spend 90% of their time waiting on customers and not actually ‘managing’ the store."

With changes in regulations, those classified as managers must have authority to hire and fire other employees, attorneys said.

"The Department of Labor is trying to ensure this law is applying to someone making managerial decisions and directing the work of other employees," says Ms. Damian.

More cases involve overtime than any other employment actions combined. They simplified some of the problems with the old regulation but not all of them.

"Companies are trying to understand the changes in labor laws," says Ms. Damian. "In reality, rules are so confusing and complex that [revisions] can take about two years to be fully integrated into the American workplace."