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commission with hourly wage West Virginia

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  • commission with hourly wage West Virginia

    We have a retail store. Our workers usually get overtime. Instead of doing that calculation to figure out the new hourly rate. Could we pay overtime hours as the commission? For example, if the their overtime rate is 15.00. Could I give a commission of 20 overtime hours added to their pay. It would be $300.00. It would be a set amount. If the goal is reached then you get 20 overtime hours.

  • #2
    I think you would need to do a few sample calculations both ways. In the end, I suspect your suggested idea would cheat them of some extra pay. Because in the end you are still paying a lump sum but disguising it as extra overtime. It's liking naming your dog "cat". He's still a dog regardless of the name. And in the end you can't tie those extra OT to actual hours worked, but rather some commissionable goal.

    I've done that calculation (actually wrote a calculator in Excel for it) and while I understand it can be convoluted for what turns out to be a small sum owed to the employee, I think it would be better to calculate what would be a top end maximum and just pay that to everyone with OT and commission (or have an amount based on a range of hourly wages vs commission) You'd be safer than playing games of renaming the type of wages.

    All it takes is one employee complaint of unfair pay practices to get your state labor board in all your records. I wouldn't and don't chance that.

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    • #3
      A short answer is probably no. A longer answer is that legally most commissions are part of the Regular Rate of Pay calculation and what you are talking about violates that requirement. If we are talking federal law only (FLSA) then there are basically two rules, minimum wage and overtime. These two rules are very old (1930s), and have a huge amount of case law and regulations associated with them. Everything that can be tried has been tried and it is very late in the game to try and invent new methods. Best to just go over the DOL.GOV website and do exactly what they say the rules are as far a MW and OT are concerned.

      Example. Bob is paid $7.25/hr. This workweek Bob works 50 hours and is paid a $100 commission. FLSA is very clear that Bob must be paid at least $508.75 for this workweek.

      50 * 7.25 = $362.50 plus $100 = $462.50.
      RRP = $462.50 / 50 = $9.25/hr.
      OT premium = 10 hrs * $9.25/hr * 50% = $46.25.
      Total minimum payment this workweek = $362.50 + $100.00 + 46.25 = $508.75.

      ------

      Unrelated to the FLSA statutory requirements, you could also be violating state statutory or common law requirements by trying to use commissions due to cover the OT requirement. I do not know WV rules.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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      • #4
        What about a day off?

        What if the employee is hourly and they meet their goal and I give them a day off with pay as the reward? Is that allowed?

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        • #5
          Of course it is allowed. The question is whether or not you are meeting statutory requirements such as MW/OT or not. There is no statutory requirement to give people paid time off. Given the above "Bob" example, Bob must be paid the statutory minimum of $508.75 in the workweek described. Giving Bob paid time off in no way alters this requirement. You either pay Bob at least $508.75 or you do not. And WV may or may not have additional requirements.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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