Food Retailers and Wholesalers Applaud DOL for Rewriting Overtime Rules for the 21st Century Economy

WASHINGTON, DC — April 20, 2004 — “Food retailers and wholesalers today applaud the U.S. Department of Labor (DOL) for working to modernize, clarify and simplify the rules governing who qualifies for overtime pay,” said Tim Hammonds, president and CEO of the Food Marketing Institute, commenting broadly on today’s release of the final white collar rules under the Fair Labor Standards Act (FLSA).

“This day is historic,” he added, “because these rules have not been changed significantly for over half a century. The old regulations were designed for a 1950s workforce populated by straw bosses and keypunch operators — not the network engineers and Webmasters of the 21st century economy.”

The rules determine whether employees are “nonexempt” and must be paid overtime for working more than 40 hours a week or “exempt” and earn a salary with no overtime pay. “These rules have been some of the most convoluted and ambiguous federal regulations on the books,” Hammonds said. “They have led to tremendous confusion for both workers and employers in the food distribution industry.

“As a result of this confusion, trial lawyers have discovered a gold mine of class-action lawsuits against employers over how they implement these regulations. FLSA class-action litigation is up by 230 percent since 1997 — legal actions that drain nearly $2 billion a year from our economy, according to Labor Secretary Elaine Chao, costing jobs and better pay for our workers.

“We look forward to reviewing the final regulations in detail to make sure they reflect the realities of the modern workplace.”