Overtime Pay Regulations
Background
The U.S. Department of Labor (DOL) Overtime Rule
On April 20, the U.S. Department of Labor (DOL) issued a revised Fair Labor Standards Act (FLSA) rule that, as currently written, threatens the rights of Registered Nurses to receive overtime compensation. Despite bipartisan efforts to block the rule, it went into effect on August 23, 2004.
In response to the over 75,000 comments from a wide array of groups, including the American Nurses Association (ANA) and concerns raised by Members of Congress from both sides of the aisle, the final DOL rule does include some improvements over the rule as it was initially proposed. However, it still remains controversial for registered nurses.
Part 541 of the new rule redefines which workers are categorized as salaried professionals, administrative managers, and executives, and, therefore, exempt from federal overtime protections.
A worker can be exempted from overtime protections under one of these categories if he or she meets a two-pronged test:
- Duties: her/his qualifications and duties must meet the standards outlined in the regulations;
- Salary: and s/he must be paid on a salary basis an amount more than $455 per week.
Although the Department of Labor correctly asserts that the status of salaried registered nurses remains unchanged under this new rule, it ignores the fact that most registered nurses are paid on an hourly basis. Registered nurses have long met the “duties test” to be considered learned professionals; however, because most registered nurses are paid on an hourly basis, they do not meet the second prong of the existing rules, i.e., the salary component, and therefore are entitled to overtime compensation.
While the "duties test" has not changed, the definition of a salaried employee has been altered to allow salaried compensation to be calculated on an hourly or a shift basis, on top of a guaranteed minimum. This creates a degree of legal ambiguity that employers may try to exploit. Creating doubt about registered nurses' right to overtime pay threatens ongoing efforts to retain and recruit nurses—particularly in a time when mandatory overtime is a common practice and RNs are in short supply.
ANA also is concerned that, if the economic disincentive of paying time-and-a-half is removed, employers are even more likely to rely on mandatory overtime as a regular nurse-staffing tool. A survey by ANA found that more than two-thirds of nurses already report working some form of mandatory, or unplanned, overtime every month.
At a time when, according to the U.S. Department of Health and Human Services, there already is a shortage of nearly 139,000 registered nurses in the United States, ANA believes federal pay guidelines should encourage the recruitment and retention of nurses. Raising doubts in the minds of hard-working RNs, as well as potential nurses, about whether they will qualify for overtime pay does not accomplish that goal.
Additional Information