The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1) Page: 69 of 93
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CRS-64
looked to nuts-and-bolts issues (i.e., to definitional questions), to practical aspects
of administering the rule, and to its more specific workforce implications.
Team Leaders. Subsection 541.203(c) of the final rule introduced the
concept of the exempt team leader. It states:
An employee who leads a team of other employees assigned to complete major
projects for the employer (such as purchasing, selling or closing all or part of the
business, negotiating a real estate transaction or a collective bargaining
agreement, or designing and implementing productivity improvements) generally
meets the duties requirements for the administrative exemption, even if the
employee does not have direct supervisory responsibility over the other
employees on the team. (Italics added.)
The AFL-CIO quickly took note of this provision, declaring that it was "an enormous
new loophole that will allow management to disqualify workers from overtime
simply by appointing them 'team leaders."'281 Responding to AFL-CIO concern,
DOL declared in flat and unqualified terms: "The final rules ensure overtime
protection for 'blue collar' team leaders and are more protective of overtime pay for
'white collar' team leaders than the current regulations."282 (Bolding in original.)
The issue had been raised during the April 28 hearing before the House
Committee on Education and the Workforce. Representative Donald Payne (D-NJ)
questioned Secretary Chao about the team leader provision.
CHAO: ... I'll be more than glad to answer the issue about team leaders because
that is also an area of confusion. In fact, our final rule strengthens overtime
protection for workers because we tighten up on the language and we clarify
language and narrowed its scope....
Ms. Chao then turned to Administrator McCutchen, who read into the record the
phasing of the final rule and affirmed "that only the leaders of these major project
teams can be exempt...." McCutchen added: "...we've defined what it means to
carry out a major assignment and limited it to only those very significant assignments
that happen in a corporation." The Administrator concluded: "So it's very much
tightened and more protective than the current regulatory language."283
Representative Payne suggested there seemed to be a certain "subjectivity"
rather than clarity. "You know, what is significant to one person may not be
significant to someone else."284 Former Wage/Hour investigator Karen Dulaney
Smith raised similar concerns. "That word [team leader] is not in the current
regulation. We don't know what that's going to mean. Team leaders," Smith stated,
281 DLR, Apr. 27, 2004, p. E3.
282 Ibid., p. E5.
283 FDCH Transcripts, pp. 27-28.
284 Ibid., p. 28.
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Whittaker, William G. The Fair Labor Standards Act: A Historical Sketch of the Overtime Pay Requirements of Section 13(a)(1), report, May 9, 2005; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc820733/m1/69/?rotate=270: accessed July 18, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.