I
104TH CONGRESS
2D SESSION
H. R. 4266
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
SEPTEMBER 27, 1996
Mr. PETRI introduced the following bill; which was referred to the Committee
on Economic and Educational Opportunities
A BILL
To amend the Fair Labor Standards Act of 1938 to pre-
scribe 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 Representa-
tives 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 amend-
ment 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 provi-
sion 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 compensa-
tion 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 Serv-
ice for Federal income tax purposes by an employ-
ee’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, commis-
sions, 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 du-
ties and the management policies or general business oper-
ations of the employee’s employer or employer’s customers
shall not be considered in determining whether such em-
ployee 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 de-
ductions 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 ex-
cess 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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