[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 647 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 647

  To amend the Fair Labor Standards Act of 1938 to prescribe a salary 
base for an exemption of an employee from the wage requirements of such 
                      Act, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 6, 1997

  Mr. Petri introduced the following bill; which was referred to the 
                Committee on Education and the Workforce

_______________________________________________________________________

                                 A BILL


 
  To amend the Fair Labor Standards Act of 1938 to prescribe a salary 
base for an exemption of an employee from the wage requirements of such 
                      Act, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND REFERENCE.

    (a) Short Title.--This Act may be cited as the ``White Collar 
Reform Act''.
    (b) Reference.--Whenever in this Act an amendment or repeal is 
expressed in terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a section or 
other provision of the Fair Labor Standards Act of 1938.

SEC. 2. SALARY EXEMPTION.

    (a) Exemption Amendment.--Section 13(a)(1) (29 U.S.C. 213(a)(1)) is 
amended by adding after ``(1)'' the following: ``any employee whose 
rate of annual compensation is not less than $40,000 or''.
    (b) Definition.--Section 13 (29 U.S.C. 213) is amended by adding at 
the end the following:
    ``(k) For purposes of subsection (a)(1)--
            ``(1) the term `annual compensation' includes all amounts 
        reportable to the Internal Revenue Service for Federal income 
        tax purposes by an employee's employer;
            ``(2) an employee's rate of annual compensation shall be 
        determined without regard to the number of hours worked by the 
        employee and shall be prorated for any employee who does not 
        work for an employer during an entire calendar year to reflect 
        annual compensation which would have been earned if the 
        employee had been compensated at the same rate for the entire 
        calendar year; and
            ``(3) reasonably anticipated bonuses, commissions, or other 
        elements of annual compensation not paid on an evenly 
        distributed bases throughout the year may be prorated over an 
        entire calendar year or over the portion of the calendar year 
        worked by the employee for the employer in determining the 
        employee's rate of annual compensation.''.

SEC. 3. ADMINISTRATIVE EXEMPTION EMPLOYEE.

    Section 13 (29 U.S.C. 213), as amended by section 2(b), is amended 
by adding at the end the following:
    ``(l) The relationship between an employee's job duties and the 
management policies or general business operations of the employee's 
employer or employer's customers shall not be considered in determining 
whether such employee is employed in a bona fide administrative 
capacity for purposes of subsection (a)(1).''.

SEC. 4. EFFECT OF CERTAIN SALARY PRACTICES.

    Section 13 (29 U.S.C. 213), as amended by section 3, is amended by 
adding at the end the following:
    ``(m)(1) The fact that an employee is subject to deductions from 
pay for absences of less than a full day or of less than a full pay 
period shall not be considered in determining whether such employee is 
an exempt employee described in subsection (a)(1) when there has not 
been an actual reduction in pay. For purposes of this paragraph, the 
term `actual reduction in pay' does not include any reduction in 
accrued paid leave or any other practice that does not reduce the 
amount of the employee's pay for a pay period.
    ``(2) The payment of overtime compensation or other additions to 
compensation based on hours worked in excess of a daily or weekly 
amount shall not be considered in determining if the employee qualifies 
for the exemption under subsection (a)(1).''.

SEC. 5. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on the date of 
the enactment of this Act and shall apply to any civil action involving 
section 13(a)(1) of the Fair Labor Standards Act of 1938 which has not 
reached final judgment before such date.
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