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Commission Pay Overtime Laws

Commissions are often a very important part of an employee’s compensation.  Many employees are paid a base salary and then commissions based upon sales or some other type of incentive.  This is a great benefit to the employer because the wage is typically much lower than it would be for a traditional salary or hourly pay scale and it motivates the employee to achieve maximum performance.  Commission pay is common in retail, auto sales, insurance sales, telemarketing and all other types of jobs and is often the reason why a motivated employee accepts a position with a company.

Many commission employees work more than 40 hours in a workweek, but many of them are not paid overtime as required under the Fair Labor Standards Act (FLSA).  The FLSA requires employers to pay all non-exempt commission employees overtime for all hours worked over 40 in the workweek.  Some states have also enacted overtime laws that regulate the number of hours an employee can work within 24 hours before receiving overtime.

In calculating the number of hours worked, the employer must consider all required work performed in all facilities and departments, both before and after a shift, including staff meetings and required paid training.  If an employer does not include all of this time in the calculation of hours worked, it can result in the employee not receiving all of the required overtime.  The employer’s failure to pay required overtime can result in a lawsuit for overtime pay.

Even when an employer does pay a commission employee overtime pay, the amount paid is often substantially less than the required amount.  This is because the employer basis the overtime pay on the hourly wage or salary and does not include the commission pay.  This is a violation of federal overtime pay laws.   For commission employees who are paid a commission on top of hourly pay, the commissions must also be included when determining “regular” wages.

In fact, when determining regular wages for the sake of calculating overtime, employers must include not only hourly earnings and/or salary, but also commissions, certain bonuses and piecework earnings. Those are added together and divided by the number of hours worked during the workweek to determine the regular rate of pay. The regular rate of pay is then multiplied by 1.5 times to determine the overtime rate.

Employers often violate the FLSA by failing to pay commission employees the required overtime pay.  If you are a commission employee who worked more than 40 hours a week but did not receive overtime pay, you may be entitled to file an unpaid overtime pay lawsuit.  These lawsuits are often filed by an entire group of employees against an employer who violates the FLSA.

If you believe you have been denied overtime pay, your best option is to contact an experienced attorney who can advise you of your rights under the FLSA and state laws.  There are strict time deadlines for filing lawsuits, so it is essential that you contact an attorney immediately.  If you wait, you may lose your ability to recover some or all of your back pay.

To determine whether you are eligible to file a wage claim, contact our experienced Commission Employee Overtime Pay Lawyers at (855) 754-2795 for a Free Consultation to discuss your case, or complete the Free Unpaid Overtime Case Review Form on this page.  We will discuss your situation and determine if you have a claim.  If you are owed unpaid wages, we will represent you under our No Fee Promise, which means there are never any legal fees or costs unless you receive a settlement.

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