[Congressional Record Volume 140, Number 35 (Thursday, March 24, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: March 24, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       INSIDE SALES COMPENSATION

                         HON. HARRIS W. FAWELL

                              of illinois

                    in the house of representatives

                        Thursday, March 24, 1994

  Mr. FAWELL. Mr. Speaker, I am pleased today to join several of my 
colleagues on the Education and Labor Committee in the introduction of 
legislation making the application of the overtime exemption under the 
Fair Labor Standards Act [FLSA] uniform for sales personnel.
  The FLSA currently provides an exemption for certain commissioned 
inside sales personnel in retail and service establishments. The 
exemption applies to the employees in these establishments provided 
that the following criteria is met: First, the employee's regular rate 
of pay must be in excess of 1\1/2\ times the minimum wage, and second, 
more than half of the employee's compensation for a representative 
period--of not less than one month--must represent commissions on goods 
or services. This exemption does not, however, extend to employees in 
wholesale establishments.
  In 1991, the Third Circuit Court of Appeals in Martin versus Cooper 
Electric Supply Co. held that wholesale inside sales personnel were not 
administrative employees eligible for a statutory exemption. This in 
effect, put an end to what had been the practice of wholesale 
establishments for years and created a difference in the compensation 
rules as they apply to retail versus wholesale inside sales personnel. 
For example, an inside salesperson for a wholesale establishment must 
be paid time and one-half for hours worked over 40 per week, even if he 
or she meets the two criteria regarding the rate of pay and 
commissions. Yet a salesperson in a retail establishment who performs 
the same duties would not have to be paid overtime, so long as the wage 
criteria was met.
  This legislation would make the application of this particular 
overtime exemption under the FLSA consistent for retail, wholesale, and 
service establishments. I would like to note that the provisions 
defining who is covered under section 13(a)(1) of the FLSA and the 541 
regulations are very confusing. Apparently the language in the act is 
the result of various amendments over the years. As we consider this 
legislation, I hope that we can also work to simplify and streamline 
the language.

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