Overseeing Overtime Practices

Not surprisingly, the availability of this money has fueled an explosion in overtime litigation. The plaintiffs' bar has become increasingly aware that overtime claims lend themselves especially well to collective and/or class actions in which attorneys' fees, liquidated damages, and other relief are available in addition to back pay. The explosion is also due in part to the overtime laws being among the most misunderstood, and correspondingly most violated, employment laws. In addition to their lack of clarity and logic, the overtime laws rely on a framework seemingly best-suited for the New-Deal era in which it developed. In other words, plaintiffs' attorneys see money to be made from employers whose internal awareness of their overtime problems lags far behind their awareness of traditionally higher profile employment-law issues such as sexual harassment.

All of these factors contributed to the U.S. Department of Labor's issuance, on March 31, 2003, of proposed revisions to its regulations governing the main exemptions from overtime pay under the Fair Labor Standards Act (FLSA). The most sweeping efforts in the proposed regulations to alter the outdated framework met with a firestorm of opposition, primarily from labor unions and other employee representatives. In response, the Department of Labor scaled back what certain commentators viewed as the most employer-friendly proposals before publishing the new “final” regulations, which became effective on Aug. 23, 2004. These final regulations essentially retained the old framework while managing some updates by codifying clarifications from existing court decisions and opinion letters. Thus, although the updated regulations attempt to adapt the overtime eligibility rules to better suit the 21st-century workplace, the bulk of the framework remains intact out of political necessity.