Overtime Exemptions under New Jersey’s Wage and Hour Laws

Guest Column By:

By Lisa M. Koblin, Esq.
Associate, Obermayer Rebmann Maxwell & Hippell LLP

The Fair Labor Standards Act (“FLSA”) and the New Jersey State Wage and Hour Law (“NJWHL”) require employers to pay all covered employees a minimum wage of $8.44 per hour, as well as1½ times the employee’s regular rate of pay for each hour of working time over 40 hours in any workweek.

An employee may be “exempt” from overtime under these laws if the employer can prove that the employee works in a bona fide executive, administrative, or professional (“White Collar”) capacity.  Although there is no exhaustive list of job titles that meet these exemptions, the legislature has identified certain criteria that must be present, at a minimum, in order for an employee to meet the White Collar exemption status.  Employers should carefully consider this criteria before making any exemption determinations, as class actions lawsuits challenging employers who wrongfully classify employees as “exempt” are clogging both the state and federal courts.

Overtime Exemptions for “White Collar” Positions

Current wage and hour laws dictate that to qualify for the executive, administrative or professional exemptions, the employee must earn a minimum of $23,600 per year, exclusive of board, lodging or other facilities.  Additionally, to be considered a bona fide executive for the purpose of overtime exemption status, the primary job duties of the employee must include: (1) management of the enterprise, or a recognized department of the enterprise; (2) customarily and regularly directing the work of two or more other employees; and (3) authority or input into the hiring or firing of other employees. 29 C.F.R. § 541.100, et seq. 

An administrative employee may be exempt if he or she: (1) primarily performs office or non-manual work; (2) directly related to the management or general business operations of the employer; and (3) regularly exercises discretion and independent judgment with respect to matters of significance. 29 C.F.R. § 541.200, et seq. Notably, these exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, utilizing physical skill and energy.

 Lastly, an employee may fall within the learned professional exemption if he or she mainly: (1) performs work requiring advanced knowledge; (2) in a field of science or learning, and (3) customarily acquired by a prolonged course of specialized intellectual instruction. 29 C.F.R. § 541.300, et seq.  According to the FLSA and NJWHL, professional work is distinguishable from work involving routine mental, manual, mechanical or physical work. 

Determining Employees’ Exemption Status

In order to accurately determine whether an employee is exempt under New Jersey’s wage and hour laws, the employer should not only consider the employee’s job description, but the actual job duties performed by that employee.  For these reasons, employers should perform an in-depth analysis of the employee’s position and consider a variety of factors before classifying an employee as exempt.  Those factors should include, but not be limited to, the following inquiries: (1) whether the employee’s daily job duties match the duties listed in the job description; (2) the specific day-to-day activities for this employee; (3) the amount of time the employee devotes to exempt versus non-exempt work; (3) the degree of supervision that this employee is subject to by his or her manager; (4) the employee’s ability to create or implement company policy; and (5) whether the  employee’s primary job duties require specialized skill or knowledge about the high school level.

Employers should also be aware that certain aspects of the above-mentioned overtime regulations are in flux and subject to change in the near future.  The courts and the new administration have yet to determine whether the Department of Labor will enforce the revised version of the overtime regulations approved under the Obama administration, (which would increase the annual salary threshold for exempt positions from $23,660 to $47,476), or some other version of the regulations that falls in between the current regulations and those proposed under the Obama administration,.  If you have any questions or concerns regarding your company’s wage and hour practices, you should contact an experienced employment law attorney.

Lisa Koblin is an attorney in Obermayer’s Labor Relations and Employment Law Department who focuses her practice on defending employers in litigation matters and providing counseling to resolve employment-related disputes. She can be reached at 215-665-2925 or lisa.koblin@obermayer.com.