Commission Pay and Calculating Overtime Wages

The question of what types of compensation must be factored into a non-exempt workers overtime pay rate is at the center of another lawsuit, only this time the key issue involves commission pay instead of bonus payments.  In a couple of earlier posts, we have discussed the similar question of when and whether bonus payments should be included when calculating an employee’s rate of pay for the purpose of overtime wage payments – see:  Oil States Case Illustrates Problem of Bonuses Not Being Included in Overtime Pay and Should My Bonus Be Included in My Overtime Pay Rate.

A Case in Indiana (Stryker Sales Corporation)

In an Indiana overtime pay case filed on behalf of field service representatives working for Stryker Sales Corporation, the employees allege that they routinely worked overtime (40+ hours per week), however, their commission pay was not included in the calculation of their overtime pay rate.  As a result, they believe that they were underpaid for every hour of overtime that they worked.  A failure to include all legally required compensation in workers’ overtime pay rate can sometimes be harder for employees to detect, but can lead to the loss of substantial amounts of income for workers (and substantial overtime labor savings for employers).

While full and proper payment under state and federal overtime wage laws is the obligation of the employer, in reality, it is the responsibility of each worker to look into and question any pay practices that may not seem right – as they often aren’t.  As the Indiana case shows, just because you are being paid some type of premium for overtime hours, it does not necessarily mean that it is the full or correct amount.  This is the case whether employed by a small business or one with many thousands of employees.  Do not assume that just because your employer is very large and has teams of HR and legal professionals they are in compliance with the labor laws that protect your rights to overtime pay.

Large Companies Are Being Caught Underpaying Workers for Overtime

overtime pay settlement handshakeWhether intentionally or inadvertently, some of the largest companies in the USA (in industries ranging from oil and gas to healthcare) have been caught underpaying workers’ for overtime and have entered into settlement agreements to resolve these claims – paying tens of millions of dollars (or more) in back overtime wages to their workers.   Employees should use the resources that are easily and freely available to them to verify that they are receiving full and fair pay, including the wage and hour division of their state and federal Department of Labor and private overtime pay lawyers.

Finally, employees should be mindful that while the labor laws on overtime are very favorable to them in many ways, there are statutes of limitations that apply to limit the time frame for such claims.  Waiting too long to act can be very costly and frustrating.

Do You Believe You Are Owed Overtime Money?

If you have any doubts as to your entitlement to overtime, contact the overtime pay experts at The Lore Law Firm for a free and confidential review.

Call 1-866-559-0400, email Michael Lore at [email protected] or submit your information using our convenient Case Evaluation form for a FREE and CONFIDENTIAL review of your circumstances, because time is money.