Neil Capobianco and Brian Murphy Published in Workforce Management "The Forgotten Overtime Exemption"

Neil Capobianco and Brian Murphy's article, "The Forgotten Overtime Exemption," was published May 29, 2008 as a feature article on Workforce Management magazine's Web site. In their article, Neil and Brian discuss how "companies with retail or service establishments that employ commissioned workers may be able to eliminate overtime liability and significantly curtail labor costs by using an often overlooked section of the Fair Labor Standards Act," set force in Section 7(i).

As they explain, "Qualifying establishments are relieved from paying overtime to employees who are paid the majority of their compensation in commissions on goods or services and who earn at least one-and-a-half times the minimum wage." Although, they warn that employers should be aware of the nuances associated with each requirement. For example, courts and the U.S. Department of Labor have found that certain establishments qualify as retail while others do not (e.g. health clubs are considered retail, but credit companies are not).

Neil and Brian conclude that the exemption can prove particularly helpful "for employers with commissioned employees who set their own schedule and work hours that, as a practical matter, evade employer control. At the very least, the availability of this exemption is worth remembering."