How Do the Overtime Laws Affect Employees Paid on Commission?
Overtime Requirements for Commission-Based EmployeesIf you do not fall into one of the federal or state exemptions to overtime, you should be paid time and a half for all hours worked in excess of 40 each week, even if you are paid solely or primarily on a commission basis.
In the past, employers had argued that commissions earned on top of base wages could be credited toward this overtime requirement. In other words, if you were paid $15.00 an hour, worked 50 hours in a week, and earned commissions at least equal to $225 (time and a half for the additional ten hours), you were not required to be paid the increased hourly rate for those ten hours as well. A 2019 decision by the Massachusetts Supreme Judicial Court, however, changed this calculus. The court held that commissions could not be credited toward the time and a half requirement. This means in the above example you should have been paid an additional $7.50 for each of the ten overtime hours, in addition to your earned commissions. The court also made clear that in all events employees must earn at least 1.5 times the minimum wage for hours over forty, regardless of commissions. This would mean if you were a commission only employee you must earn at least $14.25 an hour for the first 40 hours in a week, and $21.37 per hour for hours over forty ($15.00 and $22.5, respectively). Learn more here about overtime laws. |
We're Here to Help.OR
|
Meet Our Employment Lawyers
Emily Smith-Lee is the owner and founder of slnlaw. She is a 1996 graduate of Boston College Law School. She was previously a partner at the Boston office of a large international firm, where she worked for thirteen years before starting the firm that became slnlaw in 2009. She has been recognized as Massachusetts Superlawyer each year since 2013, and in 2018 earned recognition as one of Massachusetts Lawyers Weekly's Lawyers of the Year. She has written a book on employment law: Rules of the Road, What You Need to Know About Employment Laws in Massachusetts, been interviewed by the Massachusetts Superlawyers magazine about non compete agreements, and written an op-ed in the New York Times about the dangers of non competes. Along with the rest of the slnlaw team, she has helped hundreds of clients navigate, negotiate, or defend against their non compete agreements.
Rebecca Rogers: Rebecca is a 2006 graduate of Boston College Law School, and has worked with slnlaw since 2013. She previously worked as an intellectual property litigation attorney for Fish & Richardson in Boston, Massachusetts, and clerked for the Massachusetts Supreme Judicial Court. Rebecca has helped many clients understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
Jenna Ordway: Jenna is a 2013 graduate of Quinnipiac Law School, and also earned an LLM in Taxation from Boston University in 2015. She has been affiliated with slnlaw since 2011, first as a law clerk and then as an attorney. Jenna has been recognized since 2019 as a "Rising Star" by Massachusetts Superlawyers. Jenna works with employers to develop reasonable and enforceable employee agreements, including non competes. She has also helped employees understand and evaluate their non compete agreements and develop strategies for defending against non compete enforcement and negotiating resolution.
Elijah Bresley: Eli is a 2014 graduate of Seton Hall Law school, and has worked with slnlaw since 2020. He previously worked for a boutique employment law firm outside of Boston, and then for the Labor and Employment department of a large Boston firm. He also spent a year clerking for the judges of the Superior Court in Hartford, Connecticut. Eli has helped clients both evaluate and negotiate their non compete agreements, and defended non compete claims in state and federal courts.
How We Can Help
We have years of experience representing individuals and small businesses solve many different employment problems, large and small. You can use the button below to schedule a call back from a member of our team to learn more about working with us, or give us a call at 781-784-2322.
|
|
|
|
|
