Who Gets Paid For Overtime Work? Why and Why Not?

Section 13(a)(17) of the FLSA was added to address the issue of the exempt status of computer-related professionals and generally applies to systems analysts, programmers, and other highly-skilled computer professionals who are paid a salary or earn at least $27.63 per hour ($1,105.20 for a 40-hour workweek). Computer data entry personnel, entry-level employees who do not qualify as "skilled," computer operators, and hands-on people involved in the manufacture, repair, or maintenance of computer equipment are not exempt from FLSA and must be paid overtime.

Employer actions may affect the overtime status of employees normally considered exempt from FLSA overtime provisions. For example, if an exempt salaried employee's pay is reduced for time not worked on the same basis as nonexempt workers, that employee may be deemed eligible to receive overtime pay.

And regardless of the type of work they perform, self-employed independent contractors are not covered by the FLSA. Among others, the Internal Revenue Service (IRS) and the Department of Labor (DOL) use the following factors to determine whether a worker is an employee or an independent contractor.

An independent contractor typically:

- Makes services available to more than one employer.

- Realizes a profit or suffers a loss.

- Provides the tools, materials, and training needed to perform the work.

- Invests in facilities such as office space.

- Works and is paid by the job or project.

- Does not work set hours established by the contracting employer.

- Is not required to perform all of the work on-site.

Recognizing that Part 451 of the FLSA (white collar exemptions)is archaic, the Department of Labor proposed regulatory changes in March 2003 that would bring these exemption up-to-date. Although supported by the business community and executive branch of the federal government, the proposed regulations have come under sever criticism by labor unions and many members of Congress.

Although the issue remains up in the air, a May 2003 survey by the Society for Human Resource Management (SHRM) indicates that 68% of survey respondents believed that the changes would have a positive or extremely positive effect on human resources activities and 12% believed that the changes would have a negative effect.

So, while the DOL, employers, the executive branch of the federal government, labor unions, and members of Congress struggle with the issue, employees and the organizations that employ them must comply with the provisions of a federal statute that is, by any account, in need of updating.

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