More Retailers Can Claim Overtime Exemption for Commissioned Salespersons, DOL Says
Author: Michael Cardman, XpertHR Legal Editor
May 20, 2020
More than 100 types of businesses - including accounting firms, credit bureaus, banks, building contractors, engineering firms and real estate companies - may find it easier to claim an overtime exemption for commissioned salespersons now.
The US Department of Labor (DOL) has withdrawn a Fair Labor Standards Act (FLSA) regulation, which had listed 134 different establishments that lack a "retail concept" and therefore had long been considered to be categorically ineligible for the classified salespersons exemption.
Those businesses still must satisfy the criteria for the commissioned salespersons exemption, which remain unchanged. Among other things, they still must pay commissioned salespersons a regular rate at least one and a half times the minimum wage and provide commissions that comprise more than half the employee's compensation for a representative period.
However, the formerly blacklisted businesses will no longer automatically be assumed to be ineligible in the eyes of the DOL.
Some courts had not deferred to the DOL's list in the first place. One federal appellate court called it an "incomplete, arbitrary, and essentially mindless catalog," and another said it "does not appear to flow from any cohesive criteria."
Nevertheless, businesses will no longer need to worry about defending themselves from litigation based, in whole or in part, on their appearance on the DOL's list.