Paralegals Status Under New DOL Overtime Regulations

On March 28, 2003, the U. S. Department of Labor (DOL) asked for public comment on its proposed rule changes to the Fair Labor Standards Act of 1938 (FLSA). These changes would potentially affect a significant number of people. DOL documentation under occupation code 234 (legal assistants) shows 144,284 hourly and 210,917 salaried positions, for a total of 355,201 paralegals impacted by the rules changes. It would seem logical to presume there would be much interest in, and comments on, these proposed new regulations. However, that was not the case.

During the comment period 75,280 comments were received. Of these, over 90% were form letters generated by AFL-CIO affiliates expressing general opposition. This left approximately 600 substantive comments, with only a handful from individual paralegals, paralegal groups and associations. At the national level, The National Association of Legal Assistants (NALA) did not submit comments, while the Federation of Paralegal Associations, Inc. (NFPA) did. Most statewide associations did not submit comments. Thus, final changes to DOL regulations were made with no input from the majority of paralegals.

On April 20, 2004, after fierce political controversy and vigorous debate in the U.S. Congress and the media, the DOL announced its final regulations governing overtime eligibility for "white collar" workers pursuant to the FLSA. The full text of these regulations was published on April 23, 2004 in the Federal Register and a complete copy may be found at the DOL's website: http://www.access.gpo.gov/su_docs/fedreg/a040423c.html under Wage and Hour Division. 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.

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.

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, employees who earn at least $100,000 annually may be exempt and not entitled to overtime pay. There are, however, additional tests that may be applied to determine actual status.

One controversial area in the old exemption regulations was the "duties test." In the new rules the "duties test" was simplified and the so-called "long tests" for lower paid employees were deleted. This leaves one...