Has the Law Changed, or Is the Current Employer Wrong?

The regulation (law) that addresses your specific question has not changed. However, both employers may be right. Here's why:

401(k) regulations allow the employer to determine, to a certain extent, what is defined as "eligible compensation/pay" for contributions to the plan. For instance, some plans include overtime pay in the definition of compensation for salary deferral purposes, while others may not.

Here's an example: Assume that the plan does not include overtime in the definition of compensation and limits your salary deferral to 10% of your compensation. If you earn $10,000 as regular (straight time) pay and $1,000 in overtime, you would be allowed to defer up to $1,000 to your 401(k) because your limit will be 10% of your straight time pay.

If you cannot contribute as much as you would like to, all is not lost. If you have extra funds you want to save in a tax-advantaged retirement account, you may consider making a contribution to an IRA.