Must employers pay overtime on sales commissions?
Exempt employees. Employers do not need to pay overtime on commission payments earned by exempt outside salespeople.
Retail and service establishments. Also, overtime need not be paid on sales commissions paid by retail or service establishments if the commissions qualify as statutory overtime pay.
To qualify as statutory overtime pay, the following two conditions must be met:
- The employee's regular rate of pay must be in excess of one and one-half times the statutory minimum hourly rate; and
- More than half of the employee's compensation for a representative period (not less than a month) must represent commissions on goods and services.
Overtime required. Overtime must be paid on sales commissions earned by nonexempt employees of nonretailers. Additionally, overtime must be paid on sales commissions paid to nonexempt employees of retail and service establishments if the commissions do not qualify as statutory overtime pay.
Reprinted with permission. © CCH
Must employers pay overtime on sales commissions? Exempt employees. Employers do not need to pay overtime on commission payments earned by exempt outside salespeople.
Must employers pay overtime on sales commissions?
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