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April 29, 2004
Chao Defends New OT Regs

In testimony before the U.S. House Education and Workforce Committee, U.S. Labor Secretary Elaine L. Chao said the department's new overtime rules will strengthen overtime pay protection for 6.7 million additional workers and make the existing rules much easier for workers and employers to understand.

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"The new rules either preserve or strengthen current overtime protections based on current federal case law, regulations, or laws passed by Congress," Chao noted.

Chao also discussed a new enforcement task force within the Wage and Hour division of the Department of Labor. The new task force will oversee the transition to the new rules and will assist employers and employees with compliance questions and understanding the new rules.

The new regulations raise the salary threshold below which workers are generally guaranteed overtime. When the new rules become effective on August 23, the new threshold will be $23,660, up from $8,060 under current rules.

In addition, the new rules create a new exemption for "highly compensated" workers who customarily and regularly perform any one or more of the exempt duties or responsibilities of an executive, administrative, or professional employee. The threshold for this exemption is $100,000.

The Associated Press reports that Democrats and other critics say the new rules would make it easier for employers to reclassify workers making between $23,660 and $100,000 as exempt from overtime pay.

"[The new rule] artfully weakens the current regulation in very subtle but significant ways that will surprise employers and employees," Karen D. Smith, a former wage and hour investigator at the department, told the committee.

Democrats have said they will continue to fight the new rules. While the rules do not require congressional approval, Democrats have tried to stop the rules by blocking funds to implement the regulations.

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