Fair Pay Rules

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(Host) What color is your collar? Commentator Tim McQuiston reflects on new government guidelines that may determine how you are paid for the work you do.

(McQuiston) The US Department of Labor’s new “FairPay” rules went into effect late last month. But before we get into exactly what the new labor rules involve, here’s a little disclaimer because we’re dealing with potential legal issues.

If you have any questions about the federal government’s new FairPay regulations, please contact your attorney. The FairPay regulations do not result in weight gain or cause drowsiness.

The FairPay regulations are intended to clarify what workers can be designated as salaried employees. Obviously, this is an important issue for both employees and employers.

The original rules for deciding on who is salaried, or EXEMPT, go back to the 1930s and some of the current rules are still on the books from the 1940s. The clearest way of segregating workers, of course, has been between Blue Collar and White Collar workers. The regulations governing blue collar workers, for instance, include strict overtime rules. In fact the feds say the new rules strengthen overtime protections.

The Labor Department claims that upwards of 6 million workers have been improperly designated as exempt, in other words, exempt from overtime. The easiest way to do this is for an employer simply to call someone a manager. Everyone’s a manager these days.

The new rules significantly raise the minimum salary of someone who can be called a manager, and thus exempt. The minimum pay was raised from 155 dollars per week to 455 dollars. That’s 23,660 dollars a year. The pay level hasn’t been raised since 1975. That person must also supervise at least two workers.

The government also wanted to clarify who exactly is a white collar worker, and therefore also exempt whether they’re a manager or not. For instance, executives and professionals are exempt, as are intellectual workers like actors, educators, chefs and executive assistants.

But, so too, are first-responders like fire, police, EMTs and even park rangers. Other workers include account executives, human resource directors and financial people, because in the course of their jobs they can bind the company financially or legally.

As far as I can tell at this point, employers benefit because the exemptions have been broadened. So while it might be more difficult to call someone a manager, more positions have been added to the white collar category. The most noticeable of these involves the computer-related industries. Under the new regulations, just about anyone who does anything with a computer, except make them or repair them, are exempt. This is a growing industry, and this change could have a major impact on overtime for a variety of technology workers.

This is Timothy McQuiston.

Timothy McQuiston is editor of Vermont Business Magazine.

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