The range of skill qualifications go from not qualified to completely qualified with varying degrees of partially qualified in between. There really is no such thing as over qualified, because complete is by definition an end in itself. Over qualified is generally used for people who have complete qualifications in one area and additional qualifications in other areas, otherwise multi-talented. You would think companies would want multi-talent employees, and in many cases they do. So, why are people rejected under the heading of over qualified? Because it is really a code word or jargon term for what they dont want to say out loud. Having recently been seeking employment I mention here a few of the underlying meanings Ive come across:

1. Wow youre good, I bet you want a high starting pay.
2. Dang, you have all the qualification to do this job and mine too. Im not going to be the one to hire someone who can compete with me for my job.
3. Youre so good at that skill; you cant have time to be good at this skill.
4. (The most insulting) Youre obviously really smart, so Im sure you would be bored here; a.k.a. you are so smart and stuck in your own mind that you cant see youre going to get bored here (This is bureaucracy assuming theyre smarter than the smart people).