Preventive Law for Employers
NJ Employment Law

Oops! "Inside sales" mistakenly omitted from overtime revisions

As we recently reported. New Jersey just  adopted  the federal  “white collar” overtime regulations at 29 C.F.R. Part 541. While the FLSA Part 541 regulations define executive, administrative, professional, computer, and outside sales exemptions, employees. Part 541 does not cover the FLSA Section 7(i) exemption for commissioned sales employees of a retail or service establishment.

As a result of this omission, New Jersey regulations no longer include “an employee whose primary duty consists of sales activity and who receives at least 50 percent of his or her total compensation from commissions and a total compensation of not less than $400.00 per week”.  So, it looks like New Jersey no longer recognizes an exemption for commissioned inside sales employees.

The New Jersey Department of Labor and Workforce Development has confirmed that this omission was inadvertent, and that they are doing everything possible to fix the problem. However, it may be six months or more before the necessary regulation changes can be made.  For the time being, New Jersey law does not classify commissioned sales employees as exempt, so they should be entitled to overtime pay and other benefits.

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Ann Kiernan is an employment lawyer who has been practicing law in New Jersey for more than 30 years. She represents only employers and management and regularly provides management training companies big and small. Employment law is constantly changing, and Ann is familiar how these changes affect employers. To keep up-to-date and learn what issues are currently affecting businesses and employers in New Jersey, read the blog.

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