Total Articles: 6
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.
Court to NutriSystem salespeople: fat chance of earning overtime (pdf).
The Fair Labor Standards Act (FLSA) requires employers to pay certain employees overtime compensation when they work more than 40 hours in a given week. However, certain types of employees, including employees paid on commission, are exempt from the FLSA's overtime requirements. A new opinion from the Third U.S. Circuit Court of Appeals, the federal appellate court governing Delaware, recently defined "commission" for the FLSA purposes, indicating that more employees may be "exempt" than previously thought.
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.
Court Adopts Narrow Interpretation of "Commission" Under FLSA.
A federal court in Tennessee recently adopted a narrow interpretation of the term “commission” as that term is used in the Department of Labor (DOL) regulations interpreting the Fair Labor Standards Act (FLSA). See Wilks v. The Pep Boys (M.D. Tenn., Sep. 26, 2006). As a result of this interpretation, the court held that ten employees who filed a collective action against the employer for unpaid overtime compensation under the FLSA are not exempt from the FLSA’s overtime requirements under Section 7(i) of the Act. Accordingly, the employer must proceed to trial on their claims.
