All too often, employees and employers alike believe that commission-based employees are not entitled to receive overtime pay. Commission-based employees often work long hours, however, so the benefit of overtime pay could mean a significant increase in their overall earnings. Even if your employer mostly pays you commissions, you could miss out on substantial overtime wages that you deserve under the law. You should discuss your wage rights with an experienced New York City overtime attorney as soon as possible if your employer denies this payment for your long hours.
Overtime and Salespeople
Companies may assume that salespeople are automatically exempt from overtime requirements. Therefore, an employer may simply ignore the possibility of overtime for employees who receive mostly commission. In reality, though, many commission-based salespeople are actually not exempt from federal or New York overtime requirements at all.
Outside sales – Outside salespeople are exempt from overtime. However, not everyone who receives a commission is considered an outside salesperson. To be considered in outside sales, you must mostly conduct your work away from an office or main place of business. If you earn commission and you primarily complete your work at your employer's office, you should not fall under this exemption, even if your job involves sales.
Professional exemption – Your employer may try to claim that you are considered a “professional,” and therefore, that you fall under this exemption. However, the law states that the work of professionals requires advanced knowledge or specialized intellectual instruction. If your specific work does not meet these criteria, this exemption should not apply.
Administrative or executive exemptions – Many employees are given the job title of an administrative employee or of an executive to force them into an overtime exemption. The test for such exemptions goes well beyond job titles, however, and depends on an employee's actual duties. If you do not have administrative or managerial duties as described under FLSA, these exemptions should not apply to you.
The law is clear that, unless an exemption applies, overtime pay is required regardless of whether the wage is on a commission. Generally, employers must pay non-exempt employees at least one-and-one-half times the regular rate at which they are employed for any hours worked more than 40 in a given week. When an employer tries to raise possible exemptions to excuse the business from paying overtime, closely examine your situation with a New York City overtime attorney to determine whether your boss has denied you important overtime earnings in addition to your commission.