In Wisconsin, many workers, especially in the retail industry, are paid on commission. This means most of their pay is based on how much they sell. While this can be a boon for salespeople with a flashy smile, especially during a swell in the economy. But what happens when employees don’t make enough off of their commissions? These workers still fall under the Fair Labor Standards Act, and therefore are still due minimum wage and overtime.
There are some exemptions that commissioned workers may fall under, however. The outside sales exemption allows employees who are generally work away from the office, such as a traveling salesperson, to not qualify for FLSA protection. But, if that employee has a satellite office where they meet with customers, they likely do qualify for FLSA benefits.
There are also retail and service jobs that do not qualify for minimum wage or overtime. These establishments must make at least 75 percent of their annual income from retail and/or services in order for their employees to not be under the protection of the FLSA. In addition, workers must regularly make 1.5 times the minimum wage from commissions or tips.
Finally, there are white collar exemptions from overtime. Business administrators, executives or other kind of salaried professionals who make at least $455 a week (a number soon to change) may not qualify for mandatory overtime pay. Some commissioned workers, such as attorneys, may also fit into this category, unless they are purely commission with no guarantee of said weekly income.
The laws surrounding commissioned workers and the FLSA can become confusing quickly. An experienced attorney may be able to provide more information on the matter.
Source: National Law Review, “Do You Need to Pay Minimum Wage or Overtime to Your Commission-Paid Employees?” Bennett L. Epstein, Sept. 21, 2015
