New Jersey White Collar Overtime Regulations Now Follow Federal Regulations

The New Jersey Department of Labor and Workforce Development (NJDOL) has adopted the federal regulations regarding white collar overtime exemptions (and has repealed existing state regulations). New Jersey now joins the majority of states that track certain federal overtime exemption requirements. The new regulations are effective immediately.

As an example, New Jersey and federal wage and hour laws have exempted from overtime eligibility individuals employed in a bona fide administrative, executive, professional or outside sales capacity. This is called the “white collar” exemption. To qualify for this exemption, the employer must show that employees satisfy both a “duties” test and a “salary basis” test. The “duties” test looks at what an employee does. The “salary basis” test looks at the employee’s salary and requires that certain white collar employees be paid above a specific level of compensation.

While the U.S. Department of Labor simplified the federal regulations governing the white collar overtime exemptions in 2004, New Jersey did not follow – until now. Under the federal regulations, as simplified, an employee whose “primary duty” consists of the performance of exempt tasks, such as management tasks or non-manual work related to management or general business operations, may be classified properly as exempt. The law in New Jersey, however, had also required an employee dedicate at least 80 percent of his or her workweek to the performance of exempt tasks.

The different requirements were confusing, because employers may have properly classified employees as exempt under federal law while violating New Jersey law. The new regulations in New Jersey remove the 80-percent restriction on exempt work.