2017 - 2018 LEGISLATURE
March 9, 2017 - Introduced by Senators Hansen,
Ringhand, Carpenter, Johnson,
C. Larson, Miller, Risser, Vinehout, Wirch and Shilling, cosponsored by
Representatives Mason, Anderson, Berceau, Brostoff, Fields, Genrich,
Goyke, Hintz, Kolste, Ohnstad, Pope, Riemer, Sargent, Sinicki, Spreitzer,
Subeck, C. Taylor, Vruwink, Wachs, Zamarripa and Zepnick. Referred to
Committee on Labor and Regulatory Reform.
1An Act to renumber and amend
103.03, 109.09 (1), 111.322 2
(2m) (a) and 111.322 (2m) (b); and to create
103.02 (3) and 103.023 of the 3
statutes; relating to: the exemption of bona fide administrative, executive,
4and professional employees from the overtime pay requirements of the wage
5and hours laws, extending the time limit for emergency rule procedures,
6providing an exemption from emergency rule procedures, providing an
7exemption from rule-making procedures, and requiring the exercise of
Analysis by the Legislative Reference Bureau
Under current administrative rules promulgated by the Department of
Workforce Development, employers are generally required to pay employees 1.5
times their regular rates of pay for all hours worked in excess of 40 hours per week
(overtime pay). Those rules, however, exempt from the overtime pay requirement
employees whose primary duty consists of administrative, executive, or professional
work (exempt employees). Currently, those rules generally define an administrative,
executive, or professional employee, in part, as an employee who does not devote
more than 20 percent of his or her hours of work to activities that are not
administrative, executive, or professional in nature (20 percent rule) and who is
compensated on a salary basis at a rate of not less than $700 per month or, in the case
of a professional employee, $750 per month (compensation threshold).
This bill requires DWD, for purposes of defining an exempt employee, to set the
compensation threshold at $970 per week and to replace the 20 percent rule with a
requirement that employee's “primary duty" be administrative, executive, or
professional work. The bill provides that, by the first day of the 18th month
beginning after the bill's effective date, and annually thereafter, DWD must
promulgate emergency rules to revise that compensation threshold by calculating
the percentage change in the consumer price index for the 12-month period ending
on the last day of the last month for which that information is available and adjusting
the rate then in effect by that percentage difference.
For further information see the state and local fiscal estimate, which will be
printed as an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
103.02 of the statutes is renumbered 103.02 (1) and amended to 2
No person may be employed or be permitted to work in any place of 4
employment or at any employment for such any
period of time during any day, night, 5
or week, as that
is dangerous or prejudicial to the person's life, health, safety,
The department shall investigate, ascertain, determine,
and fix such 8
reasonable classification, classifications, issue general or special orders,
promulgate rules fixing a period of time, or hours of beginning and ending work 10
during any day, night,
or week, which shall that may
be necessary to protect the life, 11
or welfare of any person,
or to carry out the purposes of ss. 103.01 to 12
103.03. The department shall, by rule, classify such periods of time into periods to 13
be paid for at regular rates and periods to be paid for at the rate of at least one and
times the regular rates. Such investigations, classifications, rules,
orders shall be made as provided in s. 103.005 and the penalties under s. 103.005 (12)
1shall apply to and be imposed for any violation of ss. 103.01 to 103.03
. Such orders 2
shall be subject to review in the manner provided in ch. 227. Section 111.322 (2m)
3applies to discharge or other discriminatory acts arising in connection with any
4proceeding under this section.
103.02 (3) of the statutes is created to read:
The employment of any person in any employment or place of 7
employment at any time other than the permissible hours of labor under this section 8
shall be prima facie evidence of a violation of this section.
103.023 of the statutes is created to read:
10103.023 Hours of labor; exempt employees. (1) Definitions.
In this 11
(a) “Compensated on a salary basis" means to receive regularly each pay period 13
a predetermined amount constituting all or part of the employee's compensation, 14
which amount is not subject to reduction because of any of the following:
1. Variations in the quality or quantity of the work performed.
2. Absences from work occasioned by the employer or by the operating 17
requirements of the employer's business.
3. The fact that work is not available, so long as the employee is ready, willing, 19
and able to work.
(b) “Employee employed in a bona fide administrative capacity" means an 21
employee who is compensated on a salary basis at a rate of not less than the rate 22
determined under sub. (3), exclusive of board, lodging, or other facilities, whose 23
primary duty is the performance of office or nonmanual work directly related to the 24
management or general business operations of the employer or of the employer's
customers, and whose primary duty includes the exercise of discretion and 2
independent judgment with respect to matters of significance.
(c) “Employee employed in a bona fide executive capacity" means an employee 4
who is compensated on a salary basis at a rate of not less than the rate determined 5
under sub. (3), exclusive of board, lodging, or other facilities, whose primary duty is 6
management of the enterprise in which he or she is employed or a department or 7
subdivision of that enterprise, who customarily and regularly directs the work of two 8
or more other employees, and who has the authority to hire and fire other employees 9
or whose suggestions and recommendations as to the hiring, firing, advancement, 10
promotion, or any other change in status of other employees are given particular 11
weight. In this paragraph, “customarily and regularly directs" means to direct with 12
a frequency that is greater than occasional, but not necessarily constant, including 13
direction that is normally and recurrently performed every work week, but not 14
including isolated or one-time direction.
(d) “Employee employed in a bona fide professional capacity" means an 16
employee who is compensated on a salary or fee basis at a rate of not less than the 17
rate determined under sub. (3), exclusive of board, lodging, or other facilities and 18
whose primary duty is the performance of work requiring knowledge of an advanced 19
type in a field of science or learning customarily acquired by a prolonged course of 20
specialized intellectual instruction or requiring invention, imagination, originality, 21
or talent in a recognized field of artistic or creative endeavor.
(e) “Exempt employee" means an employee employed in a bona fide 23
administrative, executive, or professional capacity.
(f) “Primary duty" means the principal, main, major, or most important duty 25
that an employee performs as determined on the basis of all the factors in a particular
case, with the major emphasis on the character of the employee's job as a whole, 2
including all of the following factors:
1. The relative importance of the employee's duties as an exempt employee as 4
compared to other types of duties.
2. The amount of time spent by the employee performing the duties of an 6
3. The employee's relative freedom from direct supervision.
4. The relationship between the employee's salary and the wages paid to other 9
employees for the kind of work, other than the work of an exempt employee, 10
performed by the employee.
11(2) Exempt employees.
In promulgating rules under s. 103.02 (2) classifying 12
periods of time into periods to be paid for at regular rates and periods to be paid for 13
at a rate of at least 1.5 times the regular rates, the department shall exempt from 14
the application of those rules employees employed in a bona fide administrative, 15
executive, or professional capacity.
16(3) Pay rate determination.
(a) For the purpose of sub. (1) (b), (c), and (d), the 17
rate of compensation shall be $970 per week until the first day of the 18th month 18
beginning after the effective date of this paragraph .... [LRB inserts date]. By the 19
first day of the 18th month beginning after the effective date of this paragraph .... 20
[LRB inserts date], and annually thereafter, the department shall, subject to par. (c), 21
promulgate rules to revise that rate. The department shall revise the rate of 22
compensation by calculating the percentage difference between the consumer price 23
index for the 12-month period ending on the last day of the last month for which that 24
information is available and the consumer price index for the 12-month period 25
ending on the last day of the month 12 months prior to that month, adjusting the rate
then in effect by that percentage difference, and rounding that result to the nearest 2
multiple of 5 cents.
(b) The department may use the emergency rule procedures under s. 227.24 to 4
promulgate the rules required under par. (a). Notwithstanding s. 227.24 (1) (a) and 5
(3), the department may promulgate those rules as emergency rules without 6
providing evidence that promulgating those rules as emergency rules is necessary 7
to preserve the public peace, health, safety, or welfare and without a finding of 8
emergency. Notwithstanding s. 227.24 (1) (e) 1d. and 1g., the department is not 9
required to prepare a statement of the scope of those rules or to submit those rules 10
in final draft form to the governor for approval.
(c) Paragraph (a) does not apply if the consumer price index for the 12-month 12
period ending on the last day of the last month for which that information is available 13
has not increased over the consumer price index for the 12-month period ending on 14
the last day of the month 12 months prior to that month.
103.03 of the statutes is amended to read:
16103.03 Violations; penalty.
The employment of any person in any
17employment or place of employment at any time other than the permissible hours of
18labor shall be prima facie evidence of a violation of this section
Any employer that
19violates s. 103.02 or 103.023 is subject to the penalties under s. 103.005 (12)
. Every 20
day for each person employed, and every week for each person employed, during 21
which any employer fails to observe or to comply with any order of the department, 22
or to perform any duty enjoined by ss. 103.01 to 103.03 required by s. 103.02 or
, shall constitute a separate offense. Section 111.322 (2m) applies to
24discharge or other discriminatory acts arising in connection with any proceeding
25under s. 103.02 or 103.023.
109.09 (1) of the statutes is amended to read:
The department shall investigate and attempt equitably to adjust 3
controversies between employers and employees as to alleged wage claims. The 4
department may receive and investigate any wage claim that is filed with the 5
department, or received by the department under s. 109.10 (4), no later than 2 years 6
after the date the wages are due. The department may, after receiving a wage claim, 7
investigate any wages due from the employer against whom the claim is filed to any 8
employee during the period commencing 2 years before the date the claim is filed. 9
The department shall enforce this chapter and s. 66.0903, 2013 stats., s. 103.49, 2013 10
stats., and s. 229.8275, 2013 stats., and ss. 16.856, 103.02, 103.023,
103.82, and 11
104.12. In pursuance of this duty, the department may sue the employer on behalf 12
of the employee to collect any wage claim or wage deficiency and ss. 109.03 (6) and 13
109.11 (2) and (3) shall apply to such actions. Except for actions under s. 109.10, the 14
department may refer such an action to the district attorney of the county in which 15
the violation occurs for prosecution and collection and the district attorney shall 16
commence an action in the circuit court having appropriate jurisdiction. Any 17
number of wage claims or wage deficiencies against the same employer may be joined 18
in a single proceeding, but the court may order separate trials or hearings. In actions 19
that are referred to a district attorney under this subsection, any taxable costs 20
recovered by the district attorney shall be paid into the general fund of the county 21
in which the violation occurs and used by that county to meet its financial 22
responsibility under s. 978.13 (2) (b) for the operation of the office of the district 23
attorney who prosecuted the action.
111.322 (2m) (a) of the statutes is amended to read:
(a) The individual files a complaint or attempts to enforce any 2
right under s. 103.02, 103.023,
103.10, 103.11, 103.13, 103.28, 103.32, 103.34, 3
103.455, 104.12, 109.03, 109.07, 109.075, 146.997, or 995.55, or ss. 101.58 to 101.599 4
or 103.64 to 103.82.
111.322 (2m) (b) of the statutes is amended to read:
(b) The individual testifies or assists in any action or proceeding 7
held under or to enforce any right under s. 103.02, 103.023,
103.10, 103.11, 103.13, 8
103.28, 103.32, 103.34, 103.455, 104.12, 109.03, 109.07, 109.075, 146.997, or 995.55, 9
or ss. 101.58 to 101.599 or 103.64 to 103.82.
(1) Exempt employees.
This act first applies to an employee who is affected by 12
a collective bargaining agreement that contains provisions inconsistent with this act 13
on the day on which the collective bargaining agreement expires or is extended, 14
modified, or renewed, whichever occurs first.