On May 18, 2020, the U.S. Department of Labor’s Wage and Hour Division (WHD) announced a final rule to clarify the Fair Labor Standards Act’s (FLSA) overtime exemption for primarily commission-based employees of retail or service employers (section 7(i) exemption). The clarification narrowed the analysis to determine when an employer is a retail or service establishment by withdrawing the following:
Withdrawing these lists promotes consistency when evaluating section 7(i) claims by treating all establishments equally under the same standards and permits the re-evaluation of an industry’s retail nature as it evolves. More specifically, by withdrawing these two lists:
The WHD issued this rule without notice, without comment, and it took immediate effect.