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Challenged by straight commissions Idaho

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  • Challenged by straight commissions Idaho

    We have a sales and marketing firm in north Idaho and are in the middle of restructuring our compensation packages. When presented with our new compensation package, some employees challenged the legality of a straight commissioned employee using company equipment. It is the belief of some of the sales staff they must receive a base at least equal to minimum wage or we can be fined. Does anyone know if a W-2 inside sales employee must receive a base wage in Idaho? After more research it appears this answer is yes... please confirm. If we include a commissions draw program then if commissions don't exceed minimum wage they draw the minimum wage against the next months commissions? They way I understand employee works 40 hours at $6 they must exceed commissions of $240 or they receive this base. No commissions employee would start the next week <$240 now commissions must exceed $480 to repay draw plus new wage of $240. Do commission get applied to old draw first? Can you set a max $$$ employee may draw?
    Last edited by ELS; 10-12-2007, 07:52 PM. Reason: I found info but I now have more questions.

  • #2
    Under federal law you can pay straight commission to any employee. You must also have a settlement period (SP) at least every 30 days as a minimum; it can be longer 45/60/90 days. At this SP is where a determination is made as to whether the employee has been paid properly for the past 30 days or whatever period is the SP set at.

    If no sales is made the employee must received at least minimum wage for all hrs worked in each and every week. He may be due overtime if overtime is worked and the employer is not a service or retail establishment in which case then no overtime is due, if the employee receives 50% or more of his wages from commission and his hourly rate is at least 1 time the applicable minimum wage.

    Regulations require that employers maintain accurate records of hours worked each workday, hours worked each workweek, and earnings and wages paid. Without hours worked and earnings records, the employer will be unable to substantiate that all conditions for the exemption have been met. In addition, the employer must select a representative period of at least one month, but not more than one year, which typifies the characteristics of the employee's earning pattern, in order to test whether the employee is paid principally by commissions. (Fact Sheet #20)
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    "A veteran - whether active duty, retired, national guard, or reserve - is someone who, at one point in his or her life, wrote a blank check made payable to The 'United States of America', for an amount of 'up to and including my life.'" (Author unknown)

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