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Hourly with commissions

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  • Hourly with commissions

    I have a business in West Virginia and I have some employees that are paid all three, hourly, overtime and get a monthly commission on sales. Our overtime is time and one half. I know the wage and hourly does not like this. However I have heard there is a special calculation to add in this commission that would work. For example if the employee worked 42 hours and made $10 an hour and $15 an hour overtime and had $500 in commissions. I have been calculating it at $930 but I am afraid that will not comply.

  • #2
    Originally posted by RRS
    I have a business in West Virginia and I have some employees that are paid all three, hourly, overtime and get a monthly commission on sales. Our overtime is time and one half. I know the wage and hourly does not like this. However I have heard there is a special calculation to add in this commission that would work. For example if the employee worked 42 hours and made $10 an hour and $15 an hour overtime and had $500 in commissions. I have been calculating it at $930 but I am afraid that will not comply.

    I am not sure why you feel this would not comply. If you employees are getting OT pay for all hours over 40 worked in a week, you should be in compliance.
    Can you further clarify why you think your method does not?
    Sue
    FORUM MODERATOR

    www.laborlawtalk.com

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    • #3
      Calculation of Overtime

      It is more complicated than the last post stated. The overtime rate is calculated as:

      1) Total the number of hours (including overtime hours) x original basic rate
      2) Add the bonus
      3) Divide that number by the total number of hours
      4) The net result is the new base rate

      Using your example, the calculation is as follows:

      (42 x 10) + 500 = 920
      920/42 = 21.9047619047619 Note: Do not round yet
      (42 x 21.9047619047619) + (2 x (21.9047619047619/2))
      920 + 21.9047619047619
      Total wages for the week: $941.90

      Does this make sense to you?
      Lillian Connell

      Forum Moderator
      www.laborlawtalk.com

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      • #4
        Originally posted by LConnell
        It is more complicated than the last post stated. The overtime rate is calculated as:

        1) Total the number of hours (including overtime hours) x original basic rate
        2) Add the bonus
        3) Divide that number by the total number of hours
        4) The net result is the new base rate

        Using your example, the calculation is as follows:

        (42 x 10) + 500 = 920
        920/42 = 21.9047619047619 Note: Do not round yet
        (42 x 21.9047619047619) + (2 x (21.9047619047619/2))
        920 + 21.9047619047619
        Total wages for the week: $941.90

        Does this make sense to you?
        Hi Lil,

        Are you substituting out his word of Commissions with your "Bonus"? --bonuses do not figure into overtime. Plus, if their COMMSISIONS are $500 monthly, not weekly, would your amounts still work? Lastly, I found your formula for Californa, but is it still required for his state?
        Last edited by Sue; 01-26-2005, 10:51 AM.
        Sue
        FORUM MODERATOR

        www.laborlawtalk.com

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        • #5
          Yes that does make sense. Thank You

          Comment


          • #6
            Commissions

            By the way, I didn't catch the monthly commission. You will need to do a calculation based on the hours each week and the commissions earned within that time. If the commission is one amount, it will need to be pro-rated for each week.
            Lillian Connell

            Forum Moderator
            www.laborlawtalk.com

            Comment

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