On August 23, 2004, the U.S. Department of Labor issued new regulations for determining when "white collar" employees may be treated as "exempt" from the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) of 1938. Two of the most farreaching provisions of the new regulations are the increase in the minimum salary level that most employees must earn to qualify for exemption, from $250 per week to $455 per week, and the reclassification of certain types of workers from non-exempt to exempt.
The impact of these regulations on employees' gross pay has caused an uproar that has led Congress to consider legislation that would reverse the overtime rules. This controversy has left employers in a difficult position — they must comply with the new regulations for now, but may have to change back to previous rules in the near future.
The uncertain nature of these regulations can cause real problems for employers, especially if it's difficult to reclassify employees within their pay systems. Software products like DLx CompTrak, a time and attendance system from Red-Prairie Corp., are being developed to be fully compatible with the new Department of Labor guidelines on overtime pay. The software computes gross pay for workers based on times and jobs worked, employee classifications, and company pay rules. With one simple step, customers can reclassify affected workers, and their pay calculations will automatically be adjusted to comply with the new regulations. According to RedPrairie, users can easily change classifications and then change back again with minimal effort and cost, ensuring that gross pay will always be computed correctly.