Originally published on the Employer's Law Blog
The New Jersey Department of Labor and Workforce Development (NJDOL) is proposing an amendment intended to cure its recent wage and hour misstep.
On September 6, 2011, the NJDOL adopted the federal Fair Labor Standards Act's (FLSA's) so-called "white collar" exemption for employees working in administrative, executive, professional, or outside sales capacities. See http://www.employerslawblog.com/Entry.aspx?eID=406. In doing so, the NJDOL unintentionally eliminated the New Jersey-specific regulatory overtime exemption known as the "inside sales exemption." According to the NJDOL, the "inside sales exemption" exempted from overtime requirements "employees whose primary duty consists of sales activity and who receive at least 50 percent compensation from commissions and total compensation of not less than $400 per week." Although the "inside sales exemption" was uniquely placed within New Jersey's administrative employee exemption, it has a federal analogue in the FLSA's "Section 7(i) exemption." The NJDOL has explained that Section 7(i) states that "no employer shall be deemed to have violated subsection (a) of Section 7 of the FLSA by employing any employee of a retail or service establishment for a workweek in excess of the applicable workweek specified therein, if (1) the regular rate of pay of such employee is in excess of one and one-half times the minimum hourly rate applicable to him under Section 7 of the FLSA, and (2) more than half his compensation for a representative period (not less than one month) represents commissions on goods and services."
The NJDOL is now attempting to reverse its error and restore the "inside sales exemption" by proposing an amendment that simply readopts the exemption. While the "inside sales exemption" proposed for readoption differs from the FLSA's "Section 7(i) exemption," it does not exceed the FLSA's standards or requirements.
For more information on the proposed amendment, including information on a public hearing (to be held December 13, 2011) and the submission of written comments (by January 20, 2011), please find the attached edition of the New Jersey Register, containing the NJDOL's explanation of the proposed amendment.
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