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Illinois 'exempts' itself from proposed federal overtime exemption changes

November 22, 2010
Changes to the Illinois minimum wage law, enacted April 2, reject any U.S. Labor Department rules that would redefine overtime pay coverage for white-collar workers. Amendments proposed last year by the federal department would cut the number of workers who qualify for overtime pay. Instead, Illinois law retains the current Labor Department definitions of who is considered an exempt executive, administrative or professional employee, for purposes of overtime pay. The current definitions of white-collar employees have long been criticized as outdated, cumbersome and difficult for employers to understand and apply. Moreover, if the Labor Department does issue the expected new rules, Illinois employers will face conflicting standards governing certain white-collar employees' status as exempt or nonexempt. Of equal significance, the new Illinois law adopts a part of the proposed federal changes addresing the minimum salary threshold for the white-collar exemptions. Illinois employees now are automatically considered nonexempt- and thus qualified for overtime pay-if they earn less than the minimum threshold of $425 a week, or $22,100 a year. Previously, employees were automatically nonexempt if they earned less than $155 a week, or $8,060 a year. What is important for dealerships to remember, however, is that this law impacts only those employees who are exempt from overtime requirements on the basis of the whitecollar exemptions, such as managers and other administrative, executive, or professional employees. It does not change the present overtime exemptions for salespeople, partsmen or mechanics. The changes to the Fair Labor Standards Act, proposed last year, remain under debate.