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New White Collar Overtime Regulations Will Take Effect August 23 Despite Continued Debate, Says DOL

By James A. Prozzi and Paul J. Siegel
  • June 9, 2004

"It's going to be a long, hot summer," Assistant Secretary of Labor Victoria A. Lipnic said recently in referring to continuing efforts by some lawmakers to block parts of the new regulations on the exemptions from overtime pay for white collar employees. After over a year of comment, debate, and controversy, the Department of Labor issued the final regulations on April 23, 2004, with an effective date of August 23, 2004. While Ms. Lipnic predicted the blocking efforts ultimately will fail, Democrats and some Republicans continue a strategy of opposition based on the belief the new rules unfairly deprive many workers of their entitlement to overtime pay.

Updating the overtime regulations "is an action-forcing event creating an opportunity for compliance," Ms. Lipnic noted. She characterized the new rules as incorporating holdings from court decisions, separate "interpretative" sections of the old rule, and examples of jobs that are generally exempt. It is actual job duties, Ms. Lipnic emphasized, not job titles or descriptions, that determine whether an employee is exempt or not.

Of particular interest for health care employers, the new final regulations for the professional exemption provide much clearer guidance than the existing regulations. The professional exemption, which continues to be divided into the learned professional and creative professional categories, includes many of the most common positions held by workers in the health care field.

The learned professional duties test tracks the existing learned professional criteria, focusing on employees whose primary duties involve work requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction. The proposed language that would have allowed equivalent knowledge "through a combination of work experience, training in the armed forces, attending a technical school, attending a community college or other intellectual instruction" was not included in the new final regulations.

Particularly helpful for health care employers are the learned professional examples and explanations illustrating the application of the exemption, including occupations that properly are classified as exempt, such as:

  • Registered or certified medical technologists who have four years of college and course work approved by the Council of Medical Education of the American Medical Association;
  • Registered nurses who are registered by the appropriate state examining board (same as the current regulations; licensed practical nurses generally do not qualify for the learned professional exemption);
  • Dental hygienists who have completed four academic years of study approved by a designated credentialing body;
  • Physician's assistants who have completed four academic years of study approved by a designated credentialing body;

As noted above, the new final regulations provide that RNs are exempt, and the preamble provides that the Labor Department "... did not and does not have any intention of changing the current law regarding RNs, LPNs or other similar health care employees...." Thus, the alarms raised by many employee representatives that the exempt/non-exempt status for these positions will be changed by the final regulations are unfounded. For example, registered nurses currently are exempt, even though the overwhelming majority receives shift premiums or similar additional payment as a result of market factors. That classification remains unchanged by the new final regulations, as does the non-exempt status of licensed practical nurses.

©2004 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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