Full Citation

Title: The 'New Economy' and Its Impact on Executive, Administrative and Professional Exemptions to the Fair Labor Standards Act (FLSA)

Citation Type: Miscellaneous

Publication Year: 2001

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Abstract: 1. The salary paid to a worker is one of the most important criteria intended by the Fair Labor Standards Act (FLSA) to determine whether an employee is an executive, administrative, or professional (EAP) worker who should be exempt from overtime and minimum wage protections. Yet, the salary tests used to determine exemptions have not been changed in the last 25 years. During that period, price levels, as well as wage levels, have more than tripled.2. Indexing the salary tests to inflation would mean that two million workers would no longer earn enough money to qualify for exemption. Further, five million additional workers who currently are exempt using the 'short' duties test would no longer qualify for the 'short' duties test, but would instead be governed by a stricter 'long' duties test. An unknown number of these workers will not meet the stricter test. Consequently, the number of newly protected workers could range from two million to seven million. 3. Analysis of major industry occupation employment trends and 'New Economy' jobs indicates that the distinctions between EAP exempt and non-exempt workers originally intended under the FLSA are still relevant today.

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Authors: Cohen, Malcom S.; Grimes, Donald R.

Publisher: Dept. of Labor Special Reports

Data Collections: IPUMS USA

Topics: Labor Force and Occupational Structure

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