I don't think you really checked into the proposed changes to FLSA, you just read some AFLCIO (union) propaganda. There are some problems within the proposed changes which the House and Senate are working on. But for the most part, here is the rest of it:
The proposed rules would require overtime for as many as 1.3 million low-income workers who now do not receive it for working more than 40 hours a week. The regulations would not affect workers covered by union contract, but the Labor Department says as many as 22 million jobs may be covered by the new rules. The rules will only affect salaried, white-collar office workers who do not perform manual labor.
The proposed changes by the Bush administration are designed to update the definitions of "an employee employed in a bona fide executive, administrative or professional capacity, or the capacity of outside salesman."
Currently, workers earning up to $8,060 annually must receive overtime pay, a figure last adjusted in 1975. The proposed rule would increase that to $22,100 yearly. The Labor Department says this would mean overtime pay for 1.3 million workers who currently do not receive overtime. The proposed regulations rewrite definitions, some dating from 1949, as to which workers are exempt from mandatory overtime pay. The department and Republicans say these will clarify current rules; while Democrats and unions say the changes are designed to help employers forgo overtime.
There are tests known as the "Duties Test" and the "Salary Test" to determine if an employee fits into one of the above categories. The "duties test" is from the 1949 FLSA Rules, and the "salaries test" has not been modified since 1975. Duties test requirements are dropped that workers not devote more than one-fifth of their time to activities unrelated to their main job. Administrative employees would have to hold "a position of responsibility," doing work of "substantial importance" or "requiring a high level of skill or training." Another category - "learned professional employees" - now defined as learning their skills from "specialized intellectual instruction" could now also acquire them from work experience.
"Creative professional employees" will have to do work "requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor," but will no longer have to "consistently exercise discretion and judgment."
The salaries used in the "long test" and "short test" of the old rule are way out of date for weekly earnings:
Long test - Executive = $155
Long test - Administrative = $155
Long test - Professional = $170
Short test - Admin, Exec & Prof. = $250
The proposed changes to the "Wage Test" to determine if one of these employees is exempt from FLSA overtime:
Standard test = $425
Highly Compensated = $1250
Overtime pay provisions of FLSA:
An employer who requires or permits an employee to work overtime is generally required to pay the employee premium pay for such overtime work.
Requirements:
Unless specifically exempted, employees covered by the Act must receive overtime pay for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. There is no limit in the Act on the number of hours employees aged 16 and older may work in any workweek. The Act does not require overtime pay for work on Saturdays, Sundays, holidays, or regular days of rest, as such.
The Act applies on a workweek basis. An employee's workweek is a fixed and regularly recurring period of 168 hours -- seven consecutive 24-hour periods. It need not coincide with the calendar week, but may begin on any day and at any hour of the day. Different workweeks may be established for different employees or groups of employees. Averaging of hours over two or more weeks is not permitted. Normally, overtime pay earned in a particular workweek must be paid on the regular pay day for the pay period in which the wages were earned.
The regular rate of pay cannot be less than the minimum wage. The regular rate includes all remuneration for employment except certain payments excluded by the Act itself. Payments which are not part of the regular rate include pay for expenses incurred on the employer's behalf, premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays, discretionary bonuses, gifts and payments in the nature of gifts on special occasions, and payments for occasional periods when no work is performed due to vacation, holidays, or illness.
Earnings may be determined on a piece-rate, salary, commission, or some other basis, but in all such cases the overtime pay due must be computed on the basis of the average hourly rate derived from such earnings. This is calculated by dividing the total pay for employment (except for the noted statutory exclusions) in any workweek by the total number of hours actually worked.
Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, the regular rate for that week is the weighted average of such rates. That is, the earnings from all such rates are added together and this total is then divided by the total number of hours worked at all jobs.
Where non-cash payments are made to employees in the form of goods or facilities, the reasonable cost to the employer or fair value of such goods or facilities must be included in the regular rate.
Typical Problems the new Proposed Rule addresses:
Fixed Sum for Varying Amounts of Overtime: A lump sum paid for work performed during overtime hours without regard to the number of overtime hours worked does not qualify as an overtime premium even though the amount of money paid is equal to or greater than the sum owed on a per-hour basis. For example, no part of a flat sum of $90 to employees who work overtime on Sunday will qualify as an overtime premium, even though the employees' straight-time rate is $6.00 an hour and the employees always work less than 10 hours on Sunday. Similarly, where an agreement provides for 6 hours pay at $9.00 an hour regardless of the time actually spent for work on a job performed during overtime hours, the entire $54.00 must be included in determining the employees' regular rate.
Salary for Workweek Exceeding 40 Hours: A fixed salary for a regular workweek longer than 40 hours does not discharge FLSA statutory obligations. For example, an employee may be hired to work a 45 hour workweek for a weekly salary of $300. In this instance the regular rate is obtained by dividing the $300 straight-time salary by 45 hours, resulting in a regular rate of $6.67. The employee is then due additional overtime computed by multiplying the 5 overtime hours by one-half the regular rate of pay ($3.335 x 5 = $16.68).
Overtime Pay May Not Be Waived: The overtime requirement may not be waived by agreement between the employer and employees. An agreement that only 8 hours a day or only 40 hours a week will be counted as working time also fails the test of FLSA compliance. An announcement by the employer that no overtime work will be permitted, or that overtime work will not be paid for unless authorized in advance, also will not impair the employee's right to compensation for compensable overtime hours that are worked.
The Proposed Rule is 39 pages long, but as with all government rules and regulations, one must read it all to understand it. It is 29 CFR Part 541; A Proposed Rule Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees. You may find here if you wish to read it:
http://www.dol.gov/esa/regs/fedreg/proposed/2003033101.pdf
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