Sales employees who are paid on commission are responsible for keeping many retail and service establishments in business. Some of these employees work many overtime hours to make sure that their company is successful. Unfortunately, these employees may not receive the overtime pay they are entitled to. Below, we discuss the overtime rule on salary for exempt commissioned sales employees in North Carolina.
The overtime misclassification attorneys at Phil Gibbons Law, P.C. know how important it is to receive fair pay for the work you do. We will help you handle every aspect of your claim to make sure you get the wages you are entitled to. Call us today: 704-612-0038.
What is overtime pay?
Under the Fair Labor Standards Act (FLSA), employees are in one of two categories when it comes to overtime pay: exempt and non-exempt.
According to the FLSA, non-exempt employees are entitled to receive 1.5 times their base pay for any hours worked beyond the standard 40-hour workweek. These regulations do not apply to exempt employees, meaning that an employer does not need to pay them overtime.
Exempt vs. Non-Exempt Employees
Classification as exempt or non-exempt depends on salary and job duties performed. Generally, white collar, salaried employees are exempt. These employees often fall under one of the following exemptions:
In most cases, employees must:
- Perform job duties that relate to the business operations or management of the company
- Earn a regular salary
- Earn a salary of more than $455 per week or $23,660 per year
However, the outside sales exemption has a special set of criteria employees must meet in order to qualify as exempt.
What are the criteria for the commissioned sales employee exemption?
Commissioned sales employees have their own set of criteria an employee must meet to be exempt under Section 7(i) in the FLSA. An employer must pay their employee overtime unless the employee meets all three criteria. The criteria are as follows. The employee must:
- Work for a retail or service employer: Under this exemption, employers must make 75 percent of their sales from retail sales in the particular industry.
- Make more than 1.5 times the applicable minimum wage for each hour worked during a workweek where overtime was worked: Essentially, commissions for overtime hours must total at least 1.5 times minimum wage for an employee to be exempt.
- Make over 50 percent of the their total earnings from commission: The employer must consider a time period from one month to one year to determine if the employee made enough commissions. Employees paid only by commissions or who make more in commissions than in salary or hourly pay will automatically meet this criterion. Tips are not commission under this criterion.
Filing Suit Against an Employer for Lack of Overtime Pay
Some employers misclassify their employees as a result of an innocent misunderstanding of the laws outlined in the FLSA. Other employers misclassify their employees in an attempt to defraud employees and save money.
Misclassification of a non-exempt employee as exempt or failure to give an employee the correct amount of overtime pay could be grounds for a lawsuit.
Phil Gibbons, Charlotte, NC employee rights lawyer, can help commissioned retail sales employees recover unpaid overtime.
If your employer has failed to give you the overtime pay you legally deserve, the attorneys at Phil Gibbons Law, P.C. can help you recover overtime pay and damages from your employer.
First, your attorney will evaluate your exemption status and determine whether your employer correctly classified you. The next step will be adding up all your hours and determining how much overtime your employer owes you, if any. If your employer did not pay you what s/he owes you, we will help you file a claim against your employer to recover what you deserve.
If your case is successful, your employer will have to pay you any overtime still owed to you. You may also recover liquidated damages in double the amount of back pay owed to you. So, if your employer owed you $5,000 in overtime back pay, your employer may have to pay you an additional $5,000 in liquidated damages, making your grand total $10,000.
It is important to note that liquidated damages will not be available in every case. Your employer may be able to avoid paying liquidated damages if s/he can prove that s/he acted in good faith and did not intentionally deprive you of overtime pay.
However, simply being unaware of the FLSA regulations is not enough. Your employer will need to show that they had good reason to think that their behavior was legal.
You work long hours to increase sales for your company. The least it can do is pay you for the work you have done and the hours you have put in. To discuss the specifics of your case or for assistance in filing a claim for overtime pay, please call Phil Gibbons Law, P.C. at704-612-0038 for a free consultation.