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Iowa - rules for commission based employment

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  • Iowa - rules for commission based employment

    I work for a service company that pays straight commission. However, there have been several high paying jobs where they choose to pay a straight hourly wage instead of the commission I would have made. They do not tell you before starting the job that they are going to do this, it is determined after they see how much the job is billed for. My employer pays at 25% but if you are on time all week and meet various other criteria you are paid at 30%, however it is never listed on the pay stubs what rate you are being paid at. There are times where you are charged back if a different tech has to go back on a job but those deductions are never listed either. We are required to work until jobs are done and be on call overnights each week but there is no overtime pay ever. Employees are frequently on 19 (no jobs) during the day however they must be ready at all times for a call and are not paid for any down time. Employees are also required to be at the work shop by a certain time but may sit for hours with no work and no pay.
    Is all of this legal?

  • #2
    • The starting point is always the federal FLSA rules on minimum wage and overtime. Under FLSA this is the "dog" and everything else is the "tail". If you look at actual hours worked, during each workweek are the MT/OT requirements (averaged) being met?
    • FLSA mostly does not care about commissions.
    • There are a lot of FLSA exceptions, but to see if any of those are applicable we would need to know the industry and actual job duties.
    • On call is legally complicated. Unless the employer is forcing you to remain physically in a fixed location, probably not an issue. Forcing you to answer your cell or pager is hours worked for the length of the call but otherwise legally nothing.
    • Your state is not my state, so I will let someone else address Iowa specific law. Pay stubs are state law.
    • Is there an actual contract or CBA?
    • Which leaves common law (my employer said they would pay this and did not). If true, remedy could be Iowa DOL or small claims court.
    Last edited by DAW; 01-23-2015, 02:09 PM.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Originally posted by kayers View Post
      Employees are also required to be at the work shop by a certain time but may sit for hours with no work and no pay.
      Is all of this legal?
      This one point is likely illegal. It sounds like the FLSA "engaged to wait" line has been crossed.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

      Comment


      • #4
        Regarding the no paid overtime, what is the industry and what are your job duties? And just to be clear, you are legally an employee? Taxes withheld on your check, W-2 at year end?
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

        Comment


        • #5
          Yes, I am an employee. Taxes are taken out of my paycheck. I work in service, driving to multiple customers cleaning, televizing, hydro jetting sewer lines. We are provided company vehicles while working. We are not paid for time between calls but not allowed to do personal errands either and must be available to take a call with the company vehicle. Our day starts at the shop 8am, you may get calls and stay busy throughout the day or go "19" with no work for a few hours. However if there are multiple calls to due still at 5pm you are required to continue working until jobs are caught up, at times until 19 pm or latter. My other question is on pay being deducted for call backs & various other deductions made at the companies discretion with no notice to employees that has been done.
          Last edited by kayers; 01-23-2015, 02:25 PM.

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          • #6
            Originally posted by kayers View Post
            Yes, I am an employee. Taxes are taken out of my paycheck. I work in service, driving to multiple customers cleaning, televizing, hydro jetting sewer lines. We are provided company vehicles while working. We are not paid for time between calls but not allowed to do personal errands either and must be available to take a call with the company vehicle. Our day starts at the shop 8am, you may get calls and stay busy throughout the day or go "19" with no work for a few hours. However if there are multiple calls to due still at 5pm you are required to continue working until jobs are caught up, at times until 19 pm or latter. My other question is on pay being deducted for call backs & various other deductions made at the companies discretion with no notice to employees that has been done.
            Under FLSA, you are non-exempt, subject to normal MW/OT rules. FLSA does not care about commissions or any wages earned outside of MW/OT. Iowa law might care about those things. Common law (small claims court) likely does care about those things.

            If you must remain on the employer's premise, then the FLSA "engaged to wait" (hours worked) line has likely been crossed. If you are not required to remain on the employer's premise but are trying to claim that your time has been "sufficiently restricted" to cross the hours worked line, then we will need more information.

            Requiring you to keep working is legal.

            Regarding deductions, are you being paid federal MW? And are you being paid OT due? If so, FLSA does not care about the deduction. Iowa might care (not my state).
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              I guess my point is that there us no way for us to predict what are pay will be. If there is something broken in the line of work such as a stool it may be deducted and charge backs are deducted and the employees are never told when it happens or for how much. There is no break down of earning & deductions on pay stubs. Furthermore is it legal for the employer to require employees to have and use their personal cell phones for work? One more question, if it is impossible to do the job without gloves is the employer responsible for providing them?

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              • #8
                There is NO overtime under any circumstances. It is Strictry commission. You do not get paid for the hours you dispatch overnight when the company is forwarding all calls to your personal cell phone and you are required to dispatch calls out to techs and do calls yourself. While on call you are not required to be at the place of business but you can not for example, go home shower and go on a family outing because you must remain with your work vehicle which you can not use for personal use. Also does my employer have to pay me for time spent in the shop repairing their equipment that I must have to do my job.
                Last edited by kayers; 01-23-2015, 07:50 PM.

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                • #9
                  Your are saying what your employer is telling you. I am saying what the legal requirements are. Under federal law (FLSA) you are a vanilla non-exempt employee subject to the normal federal minimum wage and overtime requirements. Your employer saying that you are "commission only" does not make it legally true. Under FLSA the only legal "commission only" employee is the Outside Sales exception, and based on what you have said, you fail those tests. Under FLSA if you work 50 hours this work week, you must be paid a minimum of 50 x $7.25 plus 10 x $7.25 x 50% equals $398.75. The feds do not care if you ever get paid more then that for 50 hours in the workweek. Your state may have its own rules, but it is not my state. Someone else will need o address that. Your employer could correctly claim the Retail /Service Establishment exception (aka 7(i)), but that replaces the overtime requirement with something more expensive and complicated.
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

                  Comment


                  • #10
                    Yes, thank you for explaining. The problem however lies with what hours we are actually paid for, or counted as working hours. I believe that I should be paid from the time I clock in until the time I am released at night. However the company does not pay us for any time that we are not out on a call. I am also interested to know more about "engaged to wait" time, if you are an out of town tech and on call you can not leave town until released, even if there are no calls you are to remain in town until 9pm without pay. In town guys are also not allowed to leave town or be away from the property their van is at for the period of time on call, again with no pay. What are your thoughts on this?

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                    • #11
                      http://www.dol.gov/whd/regs/compliance/whdfs22.htm


                      I have included a pointer to the DOL "hours worked" factsheet. It explains "engaged to wait".

                      Just to be clear, the employer requiring you to wait in their office is legally very different then requiring you to remain in time. The first is likely leally hours worked and the second likely is not.
                      "Reality is that which, when you stop believing in it, doesn't go away".
                      Philip K. **** (1928-1982)

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