New FLSA Rules: It´s Time for Employers to Protect Themselves

On August 23, 2004, the new white collar exemption rules to the Fair Labor Standards Act went into effect. While these rules do not change the way of computing overtime pay, they do clarify the standards for determining whether a position is exempt from overtime pay. They also provide a "safe harbor" for those employers who implement certain written policies and procedures. This article discusses what employers needed to do to ensure compliance and be able to take advantage of the safe harbor provision.¹

The "safe harbor" provision adds a new safety net to the "window of correction" that is already in the FLSA regulations. Under the safe harbor provision, an employer will not lose an otherwise valid white collar (administrative, executive, or professional) exemption for improper salary deductions if the employer does not violate the regulations repeatedly or willfully, or continue to make deductions after