Unlike salaried or hourly workers, a commission-based employee is paid a percentage of revenue from all work performed for an employer. Most frequently used in high-level sales positions, the commission pay model can be incredibly lucrative for some workers — but for others, commission pay may not always be enough to meet federally-mandated wage or overtime standards.
If you’re in a commissioned role and you do not qualify as exempt under the Fair Labor Standards Act (FLSA), you’re eligible for overtime pay whenever you work more than 40 hours in a week. Unfortunately, many employers do not recognize this fact, and may be reluctant to give you a full and fair wage. If that’s the case, our attorneys at Donati Law, PLLC can give you the legal representation you need to recover overtime pay.
Commission-Based Employee Rights Under the FLSA
Although many people think of sales roles as “commission-only” jobs, the reality is that there is no such thing as a true commission-only role. If you are consistently making more than the federal minimum wage of $7.25 an hour on your commissions alone, it may make up the bulk or entirety of your paycheck. However, if you suddenly have a slower week and fall below the minimum wage, your employer still has to pay you the difference to meet federal pay standards.
Depending on whether you’re considered exempt or non-exempt from FLSA coverage, your employer may also be required to cover any overtime pay, which has to be at least 1.5 times your hourly rate. In many commission-based roles, that overtime rate will be calculated from the minimum wage, but that too will depend on whether you receive additional pay beyond your commission.
There are 6 major categories of employee that will be considered exempt from FLSA coverage:
- Executive: A salaried individual who operates in a managerial function and meets the monetary threshold of $23,600 a year or above.
- Administrative: A salaried individual who uses discretion and judgment to execute their job duties (which are office-related) and meets the monetary requirement.
- Professional: A salaried individual in a creative or learned professional field, who offers imaginative value to the employer and meets the monetary requirement.
- Computer: An individual who performs duties like designing, testing, or overseeing computer software and hardware, typically as an engineer or programmer. They must also meet the monetary requirement.
- Outside sales: An individual who works outside of the office on a daily basis, making sales or creating sales contracts.
- Highly compensated: An individual who makes more than $100,000 a year and performs one or more of the listed administrative, executive, or professional job duties.
Because many commission jobs don’t fall under one of these categories, it’s entirely possible for a commission-based employee to be non-exempt under the FLSA. If you realize that you’ve been misclassified as exempt, our legal team can help you file an unpaid overtime claim, and get the compensation you legally deserve.
With more than 35 years of legal experience throughout Memphis and the Mid-South, you can count on Donati Law, PLLC to serve as your advocate in cases relating to overtime and wage claims. We have a strong record of success in employment law matters, and we’re deeply passionate about protecting the rights of workers, commission-based or otherwise.
Contact us today for a consultation on your case!