Retail employees on commission may be exempt from overtime

Full-time employees in Florida typically work around 40 hours per week. They do this at an agreed rate, at least equivalent to the minimum wage. However, the majority of workers are also entitled to overtime pay when exceeding 40 hours per week. The overtime rate should be 1.5 times their regular pay.

Nonetheless, there are some exceptions. Retailers do not have to pay overtime rates when certain conditions are met. Here are a few things to consider.

Exemptions to overtime under the FLSA

In some cases, retail workers employed on a commission basis may not be entitled to overtime rates. Section 7(i) of the Fair Labor Standards Act (FLSA) outlines the law in this area.

A commissioned worker may be exempt from overtime if:

• They are directly employed by the retail establishment.
• Their regular pay exceeds one and one-half times the applicable minimum wage.
• Over half of the employee’s earnings are commissioned based on a representative period.

Failure to satisfy these conditions means that the employee must be paid one and one-half times their regular wage.

Where might employers run into problems?

Employers must meet regulatory requirements in terms of paying workers, whether or not they are commission-based. Failure to do so could result in wage and hour claims. Logs must be kept of hours worked, rates of pay, types of pay, bonus agreements, wage rises, and the overall earning patterns of all workers.

As you can see, navigating employment law can be tricky. We can help with this and all your employment law needs. Call us today to arrange a consultation.