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October 3, 2008 DOL Home > Compliance Assistance > By Topic > Wages and Hours Worked > Commissions |
Commissions and the Minimum Wage: Under the Fair Labor Standards Act (FLSA), employees covered by the Act who are paid on commission must be paid at least the minimum wage, just as employees who are paid by the hour or piece. Commissions and Overtime: Under the FLSA, employees covered by the Act must receive overtime pay for hours worked in excess of 40 hours in a workweek at a rate of at least one and one-half times their regular rate of pay. Their "regular rate of pay" includes commissions. FLSA, Section 7(i), exempts certain employees of retail and service establishments who are paid on a commission basis in whole or part from the FLSA's overtime pay regulations. There are two requirements for a business to be considered a "retail or service establishment":
If a retail or service employer wants to use the Section 7(i) overtime exemption for commissioned employees, three conditions must be met:
Unless all three conditions are met, the Section 7(i) exemption is not applicable, and overtime pay must be paid for all hours worked over 40 in a workweek at one and one-half the regular rate of pay, which includes commissions. COMPLIANCE ASSISTANCE MATERIALS
Every covered employer must keep certain records for each non-exempt worker. The Fair Labor Standards Act (FLSA) requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned. For a listing of the basic records that an employer must maintain, see the FLSA recordkeeping fact sheet.
APPLICABLE LAWS AND REGULATIONS
*Pursuant to the U.S. Department of Labor's Confidentiality Protocol for Compliance Assistance Inquiries, information provided by a telephone caller will be kept confidential within the bounds of the law. Compliance assistance inquiries will not trigger an inspection, audit, investigation, etc. |
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