Fair Labor Standards Act “Retail Concept” Summary
Section 7(i) of the FLSA provides an exemption from the FLSA’s overtime compensation requirement for certain commissioned employees employed by a retail or service establishment. The DOL issued this Final Rule withdrawing the “partial list of establishments” that it previously viewed as having “no retail concept” and unable to claim the section 7(i) exemption; and the “partial list of establishments” that, in its view, “may be recognized as retail” for purposes of the exemption. With the withdrawal of these lists, banks are no longer automatically disqualified from meeting the 7(i) exemption, which implies that banks may be determined to have a “retail concept” and thus rely on the 7(i) exemption. Practically, relying on the 7(i) exemption could relieve banks from having to pay overtime compensation to employees primarily paid on a commission basis, like loan officers.
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