Overtime in New Jersey? They May be, at
Least For Now
October 26, 2011 by Michael N. Morea
Last month, new overtime exemption rules of the New Jersey Department of Labor and
Workforce Development (“NJDOL”) became effective. These new rules are intended to
bring overtime exemptions under the New Jersey Wage and Hour Law (“NJWHL”) in line
with the 2004 revisions to the federal Fair Labor Standards Act rules, by repealing the
existing state overtime exemption rules and replacing them with the analogous federal
exemptions. NJDOL accomplished this by revising N.J.A.C. 12:56-7.2 to remove the
definitions of the various overtime exemptions and adopted by reference the counterpart
in the Code of Federal Regulations (“CFR”), specifically 29 CFR 541.
However, in an apparent omission, by adopting 29 CFR 541, the NJDOL removed the
state exemption for inside salespersons. The NJWHL inside salesperson exemption had
provided that salespeople who received at least 50% of their total compensation from
commissions and earned more than $400 per week, fell under the administrative
exemption to overtime. Federal regulations provide a similar exemption, but that
exemption is found in a different section of the regulations, not 29 CFR 541.
NJDOL has indicated that the removal of the inside salesperson exemption was not
intended and that it is working on rectifying the situation. In the meantime, however,
certain employees who were previously exempt from overtime are, at least for the time
being, apparently entitled to receive it.
New Jersey employers who have inside salespersons who were previously exempt from
overtime should consult legal counsel to determine how best to handle overtime for such
employees, until the state rules are revised.
Cole, Schotz, Meisel, Forman & Leonard, P.A.
Court Plaza North
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Hackensack, NJ 07601
Phone: (201) 489-3000
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Phone: (817) 810-5250
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