New Overtime Pay Rules Delayed

New federal overtime regulations (search) will not take effect automatically in 18 states, provoking widespread confusion among state officials, employers and workers, and sparking political battles over how to respond.

Those states have their own overtime requirements, some of which mirror the old federal rules being replaced in August. Legislative action is required in some states to make changes, complicating an already complex and politically turbulent issue in an election year.

"It's absolute craziness," said Camille Olson, a labor lawyer with the firm Seyfarth Shaw in Chicago.

The Labor Department (search) regulations issued last month will go into place automatically in 32 states and the District of Columbia, according to a Seyfarth Shaw analysis. Elsewhere, it is not so simple.

"We're in a wait-and-see mode," said John Andrew, chief of the Labor Standards Bureau in Montana's Labor and Industry Department.

New federal definitions of some white-collar jobs would not apply in Montana without changes to state law or state administrative rules, he said. The Legislature may have to act, but it does not meet again until January.

The federal rule is a minimum standard. States can have their own requirements, but they cannot be less generous with overtime eligibility.

The rule rewrites definitions of white-collar workers exempt from overtime pay under the 1938 Fair Labor Standards Act (search).

Labor Department officials say the changes were needed for clarification and to reduce the number of workers' lawsuits against employers. The rule, which takes effect Aug. 23, will exempt about 100,000 workers now eligible for overtime pay, officials said. Democrats and labor unions say the number will be much higher.

Underscoring the election-year importance of pocketbook issues, the Republican-controlled Senate voted 52-47 to require that overtime eligibility be guaranteed for all workers who currently qualify. Democrats want to force a vote in the House; GOP leaders acknowledge it will be close.

Department officials said they are working with states, employers and workers to answer questions and ease the confusion. An enforcement task force was created. Fact sheets and videos are posted on the department's Web site —

In Wisconsin, which has its own overtime requirements, Democratic Gov. Jim Doyle's administration said the state may chose to ignore the new federal rules in favor of the old.

Watching closely is Barb Altschwager, the human resources manager of BelGioioso Cheese Inc. in Denmark, Wis.

"I'm trying to get my hands on guidelines so that I don't charge down a path that really isn't the right path," Altschwager said. "I think if they're trying to reduce litigation, I do think they could have done a better job of providing a full package for human resources professionals."

Workers, too, are looking for answers.

Chris Vota, who has worked for the Pathmark grocery store chain for almost 30 years, is concerned he might lose his overtime pay when his union negotiates a new contract next year.

He wonders if some of his duties might be considered supervisory, and therefore exempt, under the new rules, and whether New Jersey's overtime requirements would nullify changes.

"As time goes on, it gets more and more confusing," said Vota, 46, of Eastampton, N.J., who stocks the store's frozen food section, has customer service responsibilities and fills in for his department manager.

Some states may decide not to act, viewing parts of the old rule as more favorable to workers. As a result, employers in those states ultimately could be required to comply with portions of state law and both the old and new regulations, said Olson, the labor lawyer.

The Bush administration thinks the new federal rules are more favorable to workers than the old and should be followed. But officials acknowledge they cannot force states to make changes.

"There may be a few states where their existing rules may provide more protections, but those who claim that the old federal rules are more protective than the new federal rules are just wrong," Labor Department spokesman Ed Frank said.

Among the states:

—Illinois passed a law last month keeping the old definitions of administrative, professional and executive employees. "What we don't want to do is be caught off guard by rules that hurt Illinois workers," said state Sen. Barack Obama, the Democratic candidate for U.S. Senate who led the effort,

—In Minnesota, "the state does not have to endorse or bless these changes nor will the state regulations automatically change," said Roslyn Wade, assistant commissioner of the state Labor and Industry Department.

—Arkansas is examining whether it wants to change its rule to match the federal one to make it easier on employers, said Denise Oxley, the state Labor Department's chief counsel. If it decides to act, it can do so through regulation, not legislation, she said.

"How many in Arkansas will either lose or start getting overtime? That's the big question. I can't tell you," Oxley said.

—In Connecticut, the state probably "will stick with its own set of regulations" because they are more generous than the federal ones, said Anthony J. Palermino, a Hartford lawyer.

Other states where the federal rules will not take effect automatically: Alaska, California, Colorado, Hawaii, Kentucky, Maryland, North Dakota, Oregon, Pennsylvania, Washington and West Virginia.