Hi all, I.m new to this so please bare with me.
Can someone help me with this? I deliver Pepsi and we are Teamsters.
We are being told that we are going to be paid commission and base pay,
The overtime will be paid at an Variable rate Overtime.
Which means the more we work overtime the less we will make on overtime.
Overtime now is over 8 hours.
The company keeps saying that it the "Legal Way" to pay?
We have no say as to how many cases will be on the trucks so our commission will be up to the company.
Is Variable rate Overtime legal?? Thanks

It is not the only "legal way to pay", but it can a legal way to pay if all the criteria for the fluctuating workweek method are met.
http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_778/29CFR778.114.htm

First, do you get a fixed salary per week, regardless of how many hours you work?
Secondly, if so, do you have an agreement (or is it in your union contract) that such weekly salary is intended to cover the straight-time pay for all hours worked in the workweek, no matter how few or how many?
Third, if you miss a day of work (say you're sick) and you don't have enough sick time accrued to cover the absence, is your weekly salary docked for that day?

I would note, however, that any commissions will affect the calculation as well.

Let's do some examples.

Salary = $600/wk
Worked 50 hours
Regular rate of pay = $600 / 50 = $12
Overtime Premium = $12 * 10 OT hrs * .5 (premium portion of overtime-the straight time portion is already included in the weekly salary) = $60
Total Pay Due = $600 + $60 = $660

Now, let's add in $200 commission to the above
Regular rate of pay = ($600 + $200) / 50 = $16
Overtime premium = $16 * 10 OT Hrs * .5 = $80
Total Pay Due = $600 + $200 + $60 = $880

Hi and thanks for the replay.
Our base pay is $440/wk + Commission(30cents a case we deliver)between 350 and 460 cases a day (not the same everyday) + VROT
We do have a union contract.(Teamsters)Not yet signed.
$88 a day Base. Don't work a day no base that day.
Seems that with this pay we will lose about $60 +- each day@50 hours
Hourly rate is $22.35 + time and a half for overtime,over 8 hours per day.
Is this legal? and should the Teamsters have a way around this?
I would rather get paid for the hours I work.
Thanks for all your help.

Don't work a day no base that day.

This means the fluctuating workweek method cannot be used. See the link I provided earlier.

Hi,thanks again. I read it but seems confusing? Are you saying that because we don't get a salary at a guarantied rate pre week as $440 and not per day $88 that they can't use this way to pay us?

You earlier used the phrase variable rate overtime. As Patty said, that is a phrase generally associated with the Fluctuating Workweek Method (FWW).

IF your employer wants to use variable rate overtime, THEN your employer must follow all rules associated with the Fluctuating Workweek Method.

According to what you have said, your employer is not following the rules associated with the Fluctuating Workweek Method. That means that they must follow the normal overtime rules. You need to actually read the rules. (As does your employer).
http://www.dol.gov/esa/whd/regs/compliance/whdfs23.pdf

The problem is not the salary per se. The problem is the failure to follow either the "normal" rules or the FWW rules. The "salary" per se is nothing. There is no legal problem with paying a Non-Exempt employee on a salaried basis. There is a huge problem with failing to follow the overtime rules. FWW is a legal exception to the "normal" overtime rules, but only if all of the FWW rules are followed. Per you, the normal FWW rules are not being followed.

Thank You very much.