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  • Rate pay Pennsylvania

    When I was hired at my current job as a mechanic I was promised a good rate of pay and all the O/T that I wanted. My employer recently expressed that he wants all of the employees to start working off of commission only. Is it legal for him to take away my rate pay for 40 hrs and pay me only commission?

  • #2
    You must be paid, on average, at least minimum wage for all hours worked in the workweek, including those hours that you may be sitting and waiting for a repair job to work on. This isn't as much of a commission as what is known as "flag rate" pay. Or at least I'm assuming that's what you're talking about, i.e. Job X should take 1 hour and you get paid Y dollars for doing Job X, whether it takes you 15 minutes or 2 hours. Is that the pay structure you're talking about?

    If you work in a dealership, there in an exception in the FLSA that permits the employer to not have to pay the premium portion of overtime (only the straight-time portion).
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      Agreed with the above. Two quick examples.
      - Jan works at an auto dealer as a mechanic. This workweek she works 50 hours. Under federal rules, Jan must be paid at least $7.25./hr times 50 hours = $362.50. The employer can legally pay Jan more, but cannot pay Jan less under federal law. State law could be more favorable, but not my state (but is Patty's state).
      - Dean works at a garage as a mechanic. Dean does exactly the same work as Jan. This workweek he works 50 hours. Under federal law, Dean must be paid at least $7.25/hr for the first 40 hours worked, and at least $10.875/hr for the 10 hours of overtime, or $398.75 total. Again, state law can be more favorable.

      Regarding commission only, employees whose calculation completely ignores actual hours worked, this is legally possible for Outside Sales only (not mechanics). And this is very black letter law, meaning the employer is S.O.L. if they do not follow the law.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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      • #4
        wow! Thanks for the quick reply. It's a family owned freight trailer repair company. I'm not gonna start bashing them, it makes no difference, but it's a pretty shady company.
        Flag rate is the right term for what they want I guess. They said they wanted to pay us by the job. So if I only put out 32 hrs of work but was at work for 40 hrs I would only get paid for 32 hrs. That is also legal?

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        • #5
          Minimum wage in PA is now the same as federal MW, $7.25.

          Hours worked must be considered. If you are sitting at the employer, waiting for work to do, that is compensable time, even if you just read a book or pay your bills, or do other personal tasks.
          http://www.dol.gov/dol/allcfr/ESA/Ti...9CFR785.15.htm

          So, let's say you actual are working repairing a truck for 32 hours, but you are there waiting for work for the other 8 hours. And let's say the pay the company has decided to pay for that 32 hours of repair work is $500. $500 / 40 = $12.50/hr, more than MW, legal.

          Now, let's assume the same hours, but gross pay of $250. $250 / 40 is $6.25/hr. The employer must supplement your pay up to $7.25 * 40 hours, or $290 total gross pay.

          If you work overtime, please post back, and I can go through the calculation with overtime included.

          Hope this helps.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            Sorry for the delay.
            Their plan was to pay by the hour per job. My rate is $16.25 per hr. I start a job which is quoted at 8 hrs. If I do it in 9 hrs I would only get paid for 8. If by the end of the week which is 40 hrs I put out only 32 hrs of work I would only get paid for 32 hrs at $16.25. If I put out 70 hrs I would get paid for 70 with no O/T.
            I am usually pretty good with these rules but this one seemed a little tricky. Thank you both for all your help.

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            • #7
              Calculation must be done on a workweek basis, and it goes like this.
              1. Figure out before-overtime pay based on flag rates (or piece work or whatever the employer wants to call it).
              2. Figure out the before-overtime pay based on total hours worked in work week times minimum wage.
              3. The bigger of the two numbers becomes the final before-overtime number. The key is that this number can NEVER be less then minimum wage (on a workweek basis).
              4. Then unless there is an overtime exception in play (discussed earlier), the employee receives an additional 50% premium on all hours worked in the workweek in excess of 40. Legally the overtime cannot be calculated until after step #3.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

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              • #8
                The first part is ok; $16.25 * 32 hours averages way more than minimum wage for 40 hours of work.

                But there's it is NOT legal to ignore hours worked and not pay for overtime work.

                Using your example, let's say you worked 70 hours total, but got paid $16.25 * 32 ($520). The premium portion of overtime is based on what's called "regular rate of pay", which is your total hours worked divided into your grosss pay for the workweek.
                http://www.dol.gov/dol/allcfr/ESA/Ti...CFR778.112.htm

                So.
                $520 / 70 = $7.43/hr; that's above MW, so we're OK there.
                The $520 per above is intended, in wage and hour laws under these circumstances, to compensate you for all straight-time hours; so all that is due now is the premium portion of overtime.
                $7.43 * 30 hrs OT * .5 (premium portion of overtime) = $111.45
                The minimum gross pay that would be legal, therefore would be $111.45 + $520 = $631.45.

                Does that explain it a little better? Ask if you're not clear, because this is not the easiest thing in the world for most people to understand.
                Last edited by Pattymd; 06-28-2010, 02:31 PM.
                I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                • #9
                  Yes I understand. Thank you so much. I was really just going more into detail on what they are trying to do. They seem to try to fix things their own way but they never seem to undersatnd what's legal. I've called them on it several times.
                  If they ever decide to try and do things the right way I will refer them to you two. Because they never seem believe me. I hope they don't find out the hard way someday.
                  Thanks again.

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                  • #10
                    Originally posted by jonsey View Post
                    Yes I understand. Thank you so much. I was really just going more into detail on what they are trying to do. They seem to try to fix things their own way but they never seem to undersatnd what's legal. I've called them on it several times.
                    If they ever decide to try and do things the right way I will refer them to you two. Because they never seem believe me. I hope they don't find out the hard way someday.
                    Thanks again.
                    Well, you could show them that regulation I linked you to. I'd be more than happy to charge them some exorbitant fee to tell them what they appear not to know.

                    If they go ahead with this, if they don't pay you at least as I explained, file the wage claim. Maybe that will "learn 'em".
                    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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