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  • Question regarding Commission only wage and more in Nevada Nevada

    I hope someone can assist me with this as the members here seem to be very knowledgeable.

    I work for a staffing firm whose corporate office is in California but run the satellite office here in Nevada. Over the past year, as with many companies, ours has taken a hit financially due to the economy. As such, there have been company wide pay reductions (or so we have been told) - 4 to be exact. The latest of which came in the form of converting both sales and recruiting personnel to commission only employees. In short, an individual would only receive commission pay on gross margin for those temporary employees working on assignment at client locations. I do not know if it matters but there was not any paperwork signed or offered; rather, we were simply told. (Some by phone)

    In addition to this, some of us were already working from home offices as the field offices were closed to reduce overhead.

    I must point out that at the end of this, I may come out looking the fool for sticking around but to this I say, I have been applying elsewhere and figured, some pay is better than no pay, and had no desire to join the unemployed masses.

    With that said, I'll go on...

    It has recently come to my attention that some of the individuals that are in the same boat as myself pay wise, are actually receiving a bit more in the form of gas expenses, mileage, and assistance with electricity bills and internet charges. None of this was so much as even discussed with me let alone offered. (Yes, shame on me moment.) I have also been told recently that I should not have taxes withheld from my check as I should be considered a "contract employee" as I am commission only.

    This is all new territory for me as I have always been a salaried employee and am only versed in those labor laws as well those regarding hourly wages. Laws regarding commission only employees elude me and I cannot seem to find much clarity in the Nevada labor laws.

    My question is not specific and rather general in that I definitely feel I am being wronged and should have some recourse but cannot verify any of this legally. So any confirmation from a legal standpoint would be greatly appreciated.

    I definitely intend on leaving the company as soon as I have an outside offer; however, in the meantime, I want to be compensated for the hard work I have put forth so far. One thing I am not is a "dead-beat" employee and even though all of this has transpired I have worked hard for my clients as well as trying to find work for the even less fortunate than myself.

    Thank you...

    prmirage

  • #2
    Unless you meet the duties test for the Outside Sales exempt classification you MUST be paid at least minimum wage for all hours worked. There is not such thing as "exempt" for inside sales.
    http://www.dol.gov/whd/regs/complian...tsidesales.pdf

    Of course, they probably think they're going to wiggle out from under wage and hour laws by making you independent contractors, and not employees. I doubt very seriously that you would meet the criteria for IC status (assuming that's what you mean by "not deducting taxes"). Have you been presented with any contracts or agreements tosign?
    http://www.irs.gov/pub/irs-pdf/p1779.pdf

    What absolutely amazes me is that a staffing company is trying this malarkey. They have GOT to know the difference between employees and ICs and between exempt and nonexempt employees. And if they don't, maybe they should go under.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

    Comment


    • #3
      Originally posted by Pattymd View Post
      Unless you meet the duties test for the Outside Sales exempt classification you MUST be paid at least minimum wage for all hours worked. There is not such thing as "exempt" for inside sales.
      http://www.dol.gov/whd/regs/complian...tsidesales.pdf
      My duties are divided between office (recruiting) and outside sales. Given the terms of the document, it would seem that they may be in violation.

      Originally posted by Pattymd View Post
      Of course, they probably think they're going to wiggle out from under wage and hour laws by making you independent contractors, and not employees. I doubt very seriously that you would meet the criteria for IC status (assuming that's what you mean by "not deducting taxes"). Have you been presented with any contracts or agreements tosign?
      http://www.irs.gov/pub/irs-pdf/p1779.pdf
      No contracts have been offered or signed. By deductions I mean standard federal deductions (Nevada does not have state tax) are made as would a salaried and/or hourly employee would have. What I was told by another commission sales rep from another company is that if you are 100% commission only, you are automatically considered a "contract employee" and subject to 1099 and responsible for your own taxes. I understand this may sort of a "blessing in disguise" as my taxes have been paid as it were. Although, I firmly believe that given my years total compensation, my end of years taxes would heavily fall in my favor with my child deductions, H of H claim, and EIC allowance. So it would have been nice to have the money in my pocket instead of Uncle Sam's.

      Originally posted by Pattymd View Post
      What absolutely amazes me is that a staffing company is trying this malarkey. They have GOT to know the difference between employees and ICs and between exempt and nonexempt employees. And if they don't, maybe they should go under.
      On this I whole heartedly agree.

      Comment


      • #4
        Originally posted by prmirage View Post
        What I was told by another commission sales rep from another company is that if you are 100% commission only, you are automatically considered a "contract employee" and subject to 1099 and responsible for your own taxes.
        There is no such thing as a "contract employee"; the method of compensation is irrelevant. There are independent contractors, who must meet certain criteria and who get a 1099-MISC and there are employees, who are everybody else and get a W-2.

        You are aware, however, than independent contractors also have to pay the full Social Security and medicare taxes of 15.3% (an additional 7.65% that the employer normally pays as his share), and are not covered under Worker's Comp Insurance and unemployment, plus do not get benefits, such as vacation, holiday, and medical insurance (just a few).
        Last edited by Pattymd; 10-08-2010, 11:32 AM.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

        Comment


        • #5
          Agreed. Also, worker classification is a function of statutory law. It is not a choice. This is sort of like an animal choosing on whether it wants to be a cat or dog. Sorry, but that is an externally imposed choice. So is worker classification. The government has created classification rules that the parties must follow, even if the parties do not want to.
          http://www.dol.gov/whd/regs/compliance/whdfs13.pdf
          http://www.irs.gov/businesses/small/...=99921,00.html

          -------

          If you do nothing else, start keeping track of your actual hours worked at home. Do not use any company time or equipment to do so. A paper notebook works just fine.

          Past that, at best your current employer is dishonest and in trouble. At worst, well, wait a few months, worst is likely out there and you will likely make it's acquittance. Time to get your resume current and to start looking for a new job NOW, while you still have one.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

          Comment


          • #6
            Originally posted by Pattymd View Post
            There is no such thing as a "contract employee"; the method of compensation is irrelevant. There are independent contractors, who must meet certain criteria and who get a 1099-MISC and there are employees, who are everybody else and get a W-2.
            I see what you mean thank you. I will have to determine which I fall under based on what you gave me.

            Originally posted by Pattymd View Post
            You are aware, however, than independent contractors also have to pay the full Social Security and medicare taxes of 15.3% (an additional 7.65% that the employer normally pays as his share), and are not covered under Worker's Comp Insurance and unemployment, plus do not get benefits, such as vacation, holiday, and medical insurance (just a few).
            Yes, fully aware. However, with the amount I am getting in commissions there is no way in God's or the Governments creation that I would owe at the end of the year. Especially with filing head of household and EIC with 3 children. That's why I said it would have been nice to be 1099 because I would have a higher pay check every two weeks. You know, do you want more money in your check or would you rather have a big check at the end of the year...

            Comment


            • #7
              Or would you rather not have your medical bills paid and not receive 60% of your average wages if you were hurt on the job and couldn't work? Or not have unemployment benefits if they let you go?

              Just saying, cuts both ways.
              Last edited by Pattymd; 10-08-2010, 04:28 PM.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

              Comment


              • #8
                Originally posted by DAW View Post
                Agreed. Also, worker classification is a function of statutory law. It is not a choice. This is sort of like an animal choosing on whether it wants to be a cat or dog. Sorry, but that is an externally imposed choice. So is worker classification. The government has created classification rules that the parties must follow, even if the parties do not want to.
                http://www.dol.gov/whd/regs/compliance/whdfs13.pdf
                http://www.irs.gov/businesses/small/...=99921,00.html

                -------

                If you do nothing else, start keeping track of your actual hours worked at home. Do not use any company time or equipment to do so. A paper notebook works just fine.

                Past that, at best your current employer is dishonest and in trouble. At worst, well, wait a few months, worst is likely out there and you will likely make it's acquittance. Time to get your resume current and to start looking for a new job NOW, while you still have one.
                Absolutely have started keeping track of that - $1.99 composition book from WalMart.

                Oh I make it's acquantance every time my check is low. And I have actually been trying to find other employment for 7 months without any luck unfortunately. Something will come around I am hopeful. That is one reason I don't make waves and give them a reason to let me go - a paycheck is better than none.

                I guess I was looking for something that isn't there, I don't know. Perhaps back pay. Maybe just a good argument to take to the labor board.

                :|

                Thank you for the links by the way. I will review them in more detail later this evening.

                Arvi

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