New Jersey Changes Exemption Laws

The New Jersey Department of Labor (NJDOL) recently changed their exemption laws, adopting the “white collar” laws of the Fair Labor Standards Act (FLSA). New Jersey previously spurned this change since the U.S. Department of Labor simplified it in 2004, but has now adopted the federal regulations. Effective immediately, this change repeals existing state regulations in lieu of federal ones. Many states have made similar moves to eliminate inconsistencies and confusion between the exemption rules of state and federal laws. In addition, as a part of these changes it appears that New Jersey has inadvertently deemed commissioned sales employees as not exempt, meaning that they by law are entitled compensation for overtime.

Under the FLSA, there is something called an exemption. If an employee fulfills certain criteria, he or she may be considered an exempt employee and therefore ineligible for overtime pay and other benefits. There are many exemptions which may include executives and administrators, farmworkers, employees in a seasonal recreational establishment, casual babysitters, and certain domestic service employees. There are also partial-exemptions, so determining exempt and non-exempt employees is not always black and white.

In enacting this change, it also appears that New Jersey inadvertently eliminated the exemption for commissioned sales employees. The “white collar” exemption covers administrative, executive, professional and outside sales exemptions, but does not seem to include “inside sales” exemptions. The New Jersey Department of Labor has stated that this change was inadvertent and that they are doing everything possible to complete a solution quickly. Though the law will probably be changed to incorporate commissioned sales employees, it currently leaves an opening for lawsuits against employers for violating New Jersey wage and hour law. Since the law currently does not classify commissioned sales employees as exempt, they should technically be entitled to overtime pay and other benefits.

Though New Jersey’s change to FLSA white collar exemption regulations now makes it consistent with federal regulations, change is not always smooth. Therefore, it is extremely important for both employees and employers to educate themselves about the intricacies of state and federal wage and hour laws. If you believe that your employer may be violating the FLSA (including those classified as commissioned sales employees in New Jersey) or any other employment laws, contact an experienced FLSA lawyer to see if you are entitled to receive back wages for unpaid overtime or under-payment.