Don’t Eliminate Overtime Pay
Mandatory paralegal regulation and
decent compensation needed first.
By R. Elton Johnson
September/October 2003 Issue
On March 31, 2003, the Department of Labor proposed extensive
revisions to 29 CFR Part 541, which interprets the Fair Labor Standards
Act of 1938 and implements the exemption of executive, administrative,
professional, outside sales and computer employees from overtime pay.
If these proposed revisions go into effect, most legal assistants
would find themselves ineligible for overtime pay under the revised
“learned professionals” exemption.
The change would affect paralegals’ quality of life, and the
quality of life of their dependents, with whom they would have less time
to spend, and for whom they would be less effective providers. These
revisions also would have a negative effect on the economy, as those who
are paid less obviously have less to spend. The proposed revisions are
unjust, and contrary to the spirit of the FLSA.
Under the original implementing regulations, a few categories of
relatively non-fungible, bona fide high-level white collar workers were
exempted from the overtime requirements established by the FLSA. Those
in the Department of Labor tasked with composing these FLSA white-collar
exemptions carefully articulated specific tests to identify those who
are “employed in a bona fide executive, administrative or professional”
The strictness of these tests make it clear they were designed to
distinguish bona fide high-level, well-compensated white collar workers
from low-level white collar workers.
The proposed revisions purport to combine the long and short
“duties” tests for the executive, administrative and professional
exemptions provided by the FLSA. But in fact, these revisions would
eliminate even important short duties test criteria that make it
possible to distinguish between bona fide high-level white-collar
“learned professionals” (including certain established paraprofessions)
and low-level white-collar workers.
One eliminated short duties test criterion would be that requiring
exempt administrative and learned professional employees to perform work
requiring the “consistent exercise of discretion and independent
judgment.” Another eliminated short duties criterion would be one
requiring that exempt learned professional employees have the primary
duty of performing work “requiring knowledge of an advanced type in a
field of science or learning customarily acquired by a prolonged course
of specialized intellectual instruction and study.”
And some long duties test criteria will be eliminated, including
those requiring that the primary duty of a learned professional is
“predominantly intellectual and varied in character” and is “of such
character that the output produced or the result accomplished cannot be
standardized in relation to a given period of time,” and requiring the
learned professional not devote more than 20 percent of time to
“activities that are not an essential part of and necessarily incident
to” exempt work.
What the proposed revisions substitute for such strict duties test
criteria are far more vague and ambiguous criteria that render exempt
from overtime pay any employee who merely holds a “position of
responsibility” involving “work of substantial importance” or “work
requiring a high level of skill or training,” or who acquires his or her
advanced knowledge through a combination of “intellectual instruction
and work experience.”
Paralegals comprise one of a number of adjunct paraprofessions
that have evolved within the past several decades. This general class of
worker has made possible significant improvements in the delivery of
many services in the United States, to the very considerable benefit of
the public. But while some of these paraprofessions have established
mandatory regulatory standards that include competence and educational
requirements, others have not yet done so.
As the Department of Labor’s data demonstrates, the pay of
unregulated paraprofessionals can be low indeed. For this reason, it
would be outrageously inappropriate to simply lump all these workers
into a category such as that of “learned professionals” in the
Department of Labor’s special sense, and thus exempt them en masse from
the overtime protection afforded by the FLSA. But with the exception of
those who earn less than the proposed new salary test minimum of $22,100
per year, this is precisely what the proposed revisions to these FLSA
regulations would do.
For example, an unregulated paralegal making $24,000 per year
would likely be exempt from overtime pay. Though the legal assistant
might be required to work a 70-hour week, he or she will receive no
overtime pay because the original strict criteria that would distinguish
bona fide high-level white collar professionals from low-level
paraprofessionals will have been eliminated.
For the 70 hours worked, the paralegal would receive about $460,
or under $7 per hour. Meanwhile, his or her employer would typically
bill the client for most or all of the 70 hours the paralegal worked
that week at a rate of at least 10 times that amount. Clearly, this is
the sort of exploitation that the FLSA was designed to circumvent.
The revisions to the FLSA implementing regulations as proposed by
the Department of Labor on March 31, 2003 are severely flawed.
The proposed revisions would contradict the spirit of the FLSA by
encouraging unjust employer exploitation of moderate-income low-level
white collar workers, and thus only contribute to the troubling, growing
gap between the incomes of low- and moderate-income families and
high-income families in the United States demonstrated by analysis of
Census Bureau income data [e.g., Center on Budget and Policy Priorities,
Pulling Apart: A State-by-State Analysis of Income Trends (1997), at
The question of overtime pay for paralegals often provokes
diametrically opposed views among paralegals, not unlike the views
provoked by the question of paralegal regulation.
Some argue as long as legal assistants accept overtime pay, they
will not be considered professionals. Others argue unless paralegals are
properly paid, they should be afforded overtime protection.
My own view is that withdrawal of overtime pay for paralegals
before mandatory paralegal regulation and the associated establishment
of decent compensation for all paralegals will lead to widespread abuse.
Although it’s better than the current $8,060 cut-off, the proposal that
employees paid only $22,100 or more be exempt from overtime is arguably
still vastly unfair.
A more realistic compensation test for paralegals seems
particularly appropriate if we take into account the fact that the work
of most paralegals is billed out by the employer at a rate several times
their compensation rate.
Since legal assistants are typically the one substantial billing
entity in the office that doesn’t have a significant share in the law
firm or company’s profits or have an opportunity to attain that status
(as do partners and associates, respectively), it seems only fair that
legal assistants either receive a more significant share in the
organization’s profits or receive overtime when they must work more than
40 hours per week.
The precedent established for computer employees, such as systems
analysts, programmers and software engineers, is interesting. In the
early 1990s, the Department of Labor provided that computer employees
who made more than $27.63 per hour would be exempt from overtime pay.
That is 6.5 times the then minimum wage of $4.25 per hour. Such a
compensation test at 6.5 times the minimum wage, if indexed for
inflation, might be acceptable for paralegals.
On the eve of the enactment of the FLSA in 1938, President
Franklin D. Roosevelt cited both ethical and economic reasons for the
measure. He not only recognized a responsibility to protect the quality
of life of American workers, but also explicitly appreciated that the
foundation of the country’s economy is the buying power of its people.
To ensure proper compensation of employees and to encourage employers to
hire additional employees rather than overwork existing employees, the
FLSA established a minimum wage and maximum hours for employees,
including compensation for overtime “at a rate not less than one and
one-half times the regular rate at which [one] is employed.” The duties
test should be left intact to protect those who desperately need it.
If the current administration insists on eliminating an effective
duties test and also fails to establish a realistic “salary level” test,
then paralegals and other paraprofessionals might find it necessary to
explore other ways to protect themselves from abuse.
For more resources on the FLSA, go to
There is a plethora of information
posted on the internet relating to the Department of Labor’s proposed
rule changes redefining certain exemptions to the overtime laws. A
selection of some the main sites of interest on this topic is listed
The DOL’s proposed rule changes:
U.S. Department of Labor’s
March 31, 2003 notice of proposed rule changes (from the Federal
Selected commentary on the DOL’s rule
NFPA’s comments on the DOL’s
proposed rule changes:
Economic Policy Institute’s briefing
paper on the effect of the DOL’s proposed rule changes:
DOL’s Senate testimony on the proposed
Economic Policy Institute’s Senate
testimony on the proposed rule changes:
Pending legislation relating to the
DOL’s proposed rule changes:
House Bill No. 2665
(Overtime Compensation Protection Act of 2003):
Senate Bill No. 1485 (Overtime
Compensation Protection Act of 2003):
Senate Bill No. 1356 (Departments of
Labor, Health and Human Services, and Education, and Related Agencies
Appropriations Act, 2004):
To voice your opinion regarding the
DOL’s proposed rule changes:
Contact your U.S. Senator:
Contact your U.S. Representative:
Sign Senator John Kerry’s Internet
Sign Governor Howard Dean’s Internet
if you are very ambitious:
Contact the Senate Appropriations
Committee regarding Senate Bill No. 1356
Contact the Senate Appropriations
Subcommittee on Labor, Health and Human Services and Education regarding
Senate Bill No. 1356
Contact the Senate Committee on Health,
Education, Labor and Pensions regarding Senate Bill No. 1485
Contact the House Committee on
Education and the Workforce regarding House Bill No. 2665
To keep informed on any developments on
Do a search on "overtime" at
(or with any other newsmedia search tool)
Check the pending legislation
references listed above