Aircraft Pilots Status Under New Overtime Regulations

The U. S. Department of Labor (DOL) on March 28, 2003, released proposed rule changes to the Fair Labor Standards Act of 1938 (FLSA) for public comment.

During this time period the Air Line Pilots Association (ALPA) and the Allied Pilots Association (APA), in separate but distinct comments, outlined their respective positions opposing any change in the department's August 4, 2000, Administrative Review Board ruling on the non-exempt status of pilots, under the Service Contract Act. ALPA and APA's official comments were submitted to DOL, on June 27, 2003.

Despite fierce political controversy, accompanied by a vigorous debate in the U.S. Congress and the media on April 20, 2004, the DOL announced its final regulations governing overtime eligibility for "white collar" workers pursuant to the FLSA. The DOL also unveiled a new website, titled "FairPay" (found at www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm), to help explain the changes. The full text of the regulations was published on April 23, 2004 in the Federal Register. A complete copy of those regulations may be found at http://www.access.gpo.gov/su_docs/fedreg/a040423c.html under the Wage and Hour Division.

Under the new regulations the FLSA's "white collar" exemption rule increases the salary floor under which employees must be paid overtime. Those earning $455 per week (the equivalent of $23,660 per year) or less are now automatically entitled to time-and-a-half pay for any hours worked over 40 hours per week.

HIGHLY COMPENSATED EMPLOYEES

In addition, Section 541.601 in the final regulations states:

"An employee with total annual compensation of at least $100,000 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee identified in subparts B, C or D of this part."

Therefore, highly compensated employees such as pilots, who earn at least $100,000, may be exempt and not entitled to overtime pay.

DUTIES TEST - DISCRETION AND INDEPENDENT JUDGMENT

One controversial area in the old exemption regulations was the "duties test." In the new rules the "duties test" is simplified and the so-called "long tests" for lower paid employees have been deleted. This leaves one standard test for each category of exemption. Historically, these test provisions have proven to be the catalyst for most FLSA litigation.

The "discretion and...