On February 21, 2012, the New Jersey Department of Labor amended its regulations regarding overtime to reinstate the inside sales exemption that was removed when the Department of Labor adopted the federal overtime exemptions last year. N.J.A.C. 12:56-7.2 has been amended to include a new section c stating: “Administrative shall also 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.” The New Jersey regulation resembles the federal Section 7(i) exemption that exempts retail or service establishment employees from federal overtime requirements if: (1) the employee’s regular rate of pay is greater than one-and-one half the minimum wage; and (2) more than half of the employee’s compensation comes from commissions.
Last September, New Jersey repealed its own regulations defining overtime exemptions and adopted the federal regulations. In doing so, the Department of Labor inadvertently removed the inside sales exemption that previously existed. The Department of Labor’s recent actions returns the exemption for certain inside sales employees. Employers with commissioned sales employees should consider evaluating the classification of their employees based on the amended regulation.