CHICAGO — Corporate Cleaning Service Inc., a high-rise window washing company, believes it should be exempt from overtime requirements under the Fair Labor Standards Act (FLSA) when paying its commissioned employees. Corporate Cleaning claims its window washers are exempt because they are commissioned sales employees. The Department of Labor (DOL) disagrees with Corporate Cleaning and submitted an amicus brief to the Court of Appeals supporting the window washers.
Window Washers’ Claim
The window washers filed their overtime lawsuit in 2007. The window washers claim they were denied overtime while working for the company because the company misclassified them as commissioned sales employees. They now also claim the lower court interpreted the commissioned sales employee exemption too broadly. From 2008 to 2011, the court made a number of decisions regarding Corporate Cleaning’s claims. In a bench trial, which means there was no jury, the court ruled in Corporate Cleaning’s favor. The window washers are now appealing the decision.
The FLSA, under Section 7(i), allows retail and service businesses an exemption from overtime for their commissioned sales employees. The lower court determined Corporate Cleaning was a retail or service business, the window washers were commissioned sales employees, and the exemption applied. The DOL claims that building maintenance, specifically window washing in this case, was not an intended business when the FLSA exemption was established and that Corporate Cleaning is not a retail business. More importantly, the DOL and the window washers believe Corporate Cleaning failed to provide any evidence that it was a recognized retail or service business in the window washing industry whose services were available to the general public or that the window washers’ work was sales related.
Commissioned Employees
Employees working on commission are typically paid either entirely or in part through their commissions. Not all commissioned employees or employers of commissioned employees will qualify for overtime exemption. In order to be exempt from FLSA overtime requirements, under Section 7(i), the retail or service business must meet a specific definition and the commissioned employee must work for that retail or service establishment. The employee must also earn more than half of their total earnings from commissions. And, if the employee works more than 40 hours in a week, the employees’ earnings or regular rate of pay must exceed more than one and a half (1.5) times the minimum wage for every hour worked during that week. If all three conditions are not met, then the exemption cannot be used and overtime must be paid.
If you are working on commission for a retail or service business and you believe you should be receiving overtime pay, but are not, call our knowledgeable team of overtime pay lawyers today at (855) 754-2795 to discuss your rights. Or complete the Free Unpaid Overtime Case Review form and our experienced legal team will evaluate your case. If we accept your case, we will represent you under our No Fee Promise. This means there are no legal fees or costs unless you receive a settlement.