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Total Articles: 7

National Appliance and Electronics Retailer’s Sales Commission Policy Was Lawful – For the Most Part, Sixth Circuit Rules

In what may be viewed as a pyrrhic victory, now-defunct[1] “big box” electronics, appliance and furniture retailer hhgregg’s commission-with-draws compensation program generally was lawful under the FLSA, the Sixth Circuit Court of Appeals has held. However, its policy holding employees liable for any unearned draw payments upon termination of employment would violate the Act. Stein v. hhgregg, Inc., 2017 U.S. App. LEXIS 19908 (3rd Cir. Oct. 12, 2017). The Sixth Circuit has jurisdiction over Kentucky, Michigan, Ohio and Tennessee.

Are "Draws" Against Commissions Unlawful "Kick-Backs"?

Media reports have mistakenly suggested that a recent decision by the Sixth Circuit U.S. Court of Appeals (Kentucky, Michigan, Ohio, and Tennessee) found the federal Fair Labor Standards Act to prohibit recouping a draw or advance from future earnings. However, a closer reading of the opinion proves that you can't judge a ruling by its headings.

Commissioned Sales Employee Not Entitled To Commission Payment Under The Plain Language Of Incentive Compensation Plan

This blog has stressed (most recently here and here) the importance of carefully drafting incentive compensations plans to avoid unintentionally converting incentive compensation into earned “wages” protected under state law. Another recent decision, this one from the Court of Appeals for the Seventh Circuit reinforces the employer benefits of careful drafting. Lawson v. Sun Microsystems, Inc., 2015 U.S. App. LEXIS 11201 (7th Cir. June 30, 2015).

How to Calculate Overtime for Salaried Employees Who Also Receive Commissions [Wage & Hour FAQ]

Reading about a recent lawsuit filed against Groupon, I was reminded that even the most cutting edge businesses may not understand the nuances associated with calculating overtime and find themselves a target for running afoul of wage and hour laws. My colleague and fellow blogger, Bill Pokorny, wrote a helpful blog entry last week on calculating overtime for salaried employees. I thought it might be useful for our readers if a follow-up entry was posted discussing how to calculate overtime for salaried, non-exempt employees who also receive commissions.

Retailers Might Want To Consider The FLSA's "Commission" Exemption

More than ever, retailers are being squeezed between rising costs (including labor expense) and sagging revenue. What if there was a lawful way to compensate retail employees that gives them a stake in working to increase sales while at the same time eliminating the need to pay overtime? There is such an alternative, but many employers are overlooking it.

Quick Quiz Answer: FLSA Overtime On Commissions.

The federal Fair Labor Standards Act does not require overtime to be calculated in the way shown in our June 11 post. The overtime amount the FLSA actually calls for is about 30% of the figure shown there.

Dealership Update: Getting Your Pay Plans Right.

One of the greatest employment problems facing dealerships is properly calculating compensation for commission-based employees, and for those employees who have production-based bonuses. Pay plans are frequently challenged in court on the grounds that the terms of the plan were ambiguous or that an employee was entitled to more compensation than the dealership provided. Two recent court rulings, in California and Pennsylvania, provide clarification and valuable tools to dealerships in defending themselves against challenges to their pay plans. Sommer v. The Vanguard Group, and Koehl v. Verio.
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