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Don’t Eliminate Overtime Pay

Mandatory paralegal regulation and decent compensation needed first.
By R. Elton Johnson III, RP
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” capacity.

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 www.cbpp.org/pa-2.htm].

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 www.legalassistanttoday.com.



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 below.

The DOL’s proposed rule changes:

U.S. Department of Labor’s March 31, 2003 notice of proposed rule changes (from the Federal Register): http://www.dol.gov/esa/

Selected commentary on the DOL’s rule changes:

NFPA’s comments on the DOL’s proposed rule changes:  http://www.paralegals.org/

Economic Policy Institute’s briefing paper on the effect of the DOL’s proposed rule changes: http://www.epinet.org/

DOL’s Senate testimony on the proposed rule changes: http://appropriations.senate.gov/

Economic Policy Institute’s Senate testimony on the proposed rule changes: http://www.epinet.org/

Pending legislation relating to the DOL’s proposed rule changes:

House Bill No. 2665 (Overtime Compensation Protection Act of 2003): http://thomas.loc.gov/cgi-bin/query/z?c108:H.R.2665:

Senate Bill No. 1485 (Overtime Compensation Protection Act of 2003): http://thomas.loc.gov/cgi-bin/query/z?c108:S.1485:

Senate Bill No. 1356 (Departments of Labor, Health and Human Services, and Education, and Related Agencies Appropriations Act, 2004): http://thomas.loc.gov/cgi-bin/query/z?c108:S.1356:

To voice your opinion regarding the DOL’s proposed rule changes:

Contact your U.S. Senator:  http://www.senate.gov/

Contact your U.S. Representative:  http://www.house.gov/

Sign Senator John Kerry’s Internet petition:  http://petition.johnkerry.com/

Sign Governor Howard Dean’s Internet petition: http://www.deanforamerica.com/

And, if you are very ambitious:

Contact the Senate Appropriations Committee regarding Senate Bill No. 1356 http://appropriations.senate.gov/

Contact the Senate Appropriations Subcommittee on Labor, Health and Human Services and Education regarding Senate Bill No. 1356 http://appropriations.senate.gov/

Contact the Senate Committee on Health, Education, Labor and Pensions regarding Senate Bill No. 1485 http://health.senate.gov/

Contact the House Committee on Education and the Workforce regarding House Bill No. 2665 http://edworkforce.house.gov/

To keep informed on any developments on this issue:

Do a search on "overtime" at news.google.com or news.yahoo.com (or with any other newsmedia search tool)

Check the pending legislation references listed above

R. Elton Johnson III, RP, has been a paralegal in Hawaii since 1987. He has served as director of the Hawaii Paralegal Association’s newsletter and membership committees, and chairs its Web site and regulation committees. Johnson is a regular pro bono volunteer with Volunteer Legal Services Hawaii, and supports various Hawaii State Bar Association efforts including its Law Week programs, its Legal Line program, its Task Forces on Access to Justice and Paralegal Certification, and its Consumer Protection Committee. Johnson is a lifetime student of philosophy and an avid bodysurfer.

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