News & Analysis as of

Sales Commissions Wage and Hour

Sixth Circuit Provides Clarification On Legality Of Draw-On-Commission Policy

Last month, the Sixth Circuit revived a lawsuit brought under the Fair Labor Standards Act (“FLSA”) alleging that a retailer’s commission policy was unlawful in Stein v. hhgregg, Inc., 2017 U.S. App. LEXIS 19908 (6th Cir....more

California Commissioned Salespersons May Be Entitled to Separate Compensation for Wide Range of Activities in Addition to Rest...

Commissioned salespersons are employed in a variety of industries. While “outside salespeople” are generally exempt from minimum wage and meal and rest break requirements, so-called “inside” salespeople working at a retail...more

Sales Commission Agreements Can Limit Potential Liability

by Foley & Lardner LLP on

A manufacturing company’s sales employee successfully convinces a new customer to purchase a commercial cooler. Under the employee’s sales commission plan, she receives a commission of 2% of the price of the cooler and any...more

Sixth Circuit Draws the Line: Draws on Future Commissions and Post-Termination Payback Policies

Employers beware. A recent case serves as a reminder as we wind down the calendar year that employers should closely review their policies and procedures applying to employees paid on a 100% commission or draw basis. In Stein...more

A “New Look” for Salon Employee Commission Arrangements in California

A new addition to California law changes the definition of commission pay for licensed employees of beauty salons and barber shops. Under the new law, certain common arrangements, such as agreements to pay stylists on a...more

ComMISSION Impossible: The Pitfalls of California Commission Agreements

by Seyfarth Shaw LLP on

Seyfarth Synopsis: There are many different ways to pay employees in California. What is the scoop behind paying commissions? What are commission agreements and how have courts deciphered their coded mysteries?...more

Are "Draws" Against Commissions Unlawful "Kick-Backs"?

by Fisher Phillips on

Media reports have mistakenly suggested that a recent decision by the Sixth Circuit U.S. Court of Appeals (Kentucky, Michigan, Ohio, and Tennessee) found the federal Fair Labor Standards Act to prohibit recouping a draw or...more

National Appliance And Electronics Retailer’s Sales Commission Policy Was Lawful – For The Most Part, Sixth Circuit Rules

by Jackson Lewis P.C. on

In what may be viewed as a pyrrhic victory, now-defunct[1] “big box” electronics, appliance and furniture retailer hhgregg’s commission-with-draws compensation program generally was lawful under the FLSA, the Sixth Circuit...more

Big Commissions & FLSA Omissions: How Employers Could Be Required to Pay Six-Figure Earners Overtime Wages

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A recent decision highlights why the FLSA is not always the remedial statute created to protect low-income workers by holding that four commission-based sales representatives, each earning six figures, were...more

Employer Can Use Draw-On-Commissions but Cannot Require Repayment Upon Termination

On October 12, the Sixth Circuit Court of Appeals partially approved and partially rejected an unusual pay plan designed to satisfy federal minimum wage requirements. In Stein v. HHGregg, Inc., the employer placed retail...more

Courts Will Not Sever Defective Termination Provisions

by Bennett Jones LLP on

North v Metaswitch Networks Corporation, 2017 ONCA 790 [Metaswitch] is the latest in a series of employee-friendly appellate level decisions where a contractual termination provision is not enforced. The Ontario Court of...more

Sixth Circuit Cries Foul on Post-Termination Repayment of Recoverable Draw

by Seyfarth Shaw LLP on

Seyfarth Synopsis: A common feature of many a commission plan is the recoverable draw that is offset against future commissions. The DOL has long held this is a permissible way to satisfy the minimum wage requirement. In a...more

Service Advisors at Auto Dealerships: An FLSA Exemption Case Makes its Way Back to the Supreme Court

by McNees Wallace & Nurick LLC on

The United States Supreme Court will address again whether service advisors are exempt from overtime compensation requirements of the Fair Labor Standards Act (“FLSA”)....more

Sales Representative Who Was Paid $900,000 Can Still Claim Violation of Overtime Law, Says Federal Court

by Zuckerman Spaeder LLP on

Under federal law, employers must pay employees time-and-a-half if they work over 40 hours in a workweek, unless the employees are exempt from the overtime law. Employers don’t usually think of an employee who takes home...more

Class Action Suits Against Massachusetts Car Dealers on the Rise

by Mintz Levin on

Spurred by a recent change in a Massachusetts wage and hour regulation, plaintiffs’ attorneys are aggressively pursuing class action lawsuits seeking unpaid overtime premium pay on behalf of car salespeople across the...more

Picking a Fight: How California Makes Employment Law Peculiar

by Seyfarth Shaw LLP on

Seyfarth Synopsis: Our mission here at Cal-Pecs is to illuminate how California employment law differs from the law that employers generally experience throughout America. In this back-to-basics piece, we provide some...more

The Ugly Side Of Salon & Spa Compensation

by Fox Rothschild LLP on

Earlier this week, I was advising a client on the termination of one of their spa employees. During the course of the conversation about his poor performance, the issue of his compensation came up. Turns out, while the...more

Where’s The Rest Of My Pay?

In Vaquero v. Stoneledge Furniture LLC, a California Court of Appeal recently held that inside sales employees who are paid on a 100% commission basis must be separately compensated for their rest periods. Though inside...more

Key California Employment Law Cases: February 2017

by Payne & Fears on

The key California employment law cases from February 2017 involve collective bargaining/union and wage and hour issues. - Collective Bargaining/Union Issues - Vasserman v. Henry Mayo Newhall Memorial Hospital, 8 Cal....more

The Resurgence Of The Hourly Rate To Recognize Performance

by Fisher Phillips on

The minimum wage is here to stay, but it has become more complicated to apply to some classes of employees. Until this century, the issue of whether employees are adequately paid at the applicable minimum wage in California...more

California Employees Paid on Commission Must Be Paid Separately for Rest Breaks

A California court recently held that employees paid by commission must be separately paid for their rest breaks. The employer had a policy of paying furniture sales employees a guaranteed minimum hourly rate as a draw...more

Employees Paid on a Commission Basis Must Be Paid a Separate Minimum Wage for Rest Periods

by Bass, Berry & Sims PLC on

Employers who pay employees commissions should evaluate their compensation schemes to ensure compliance with California law in light of the California Court of Appeals’ recent ruling in Vaquero, et al. v. Stoneledge...more

Word to the Wise: Commission Paid Employees

by Weintraub Tobin on

For several years, California law has required that whenever an employer hires an employee and “the contemplated method of payment of the employee involves commissions … the contract shall be in writing and shall set forth...more

Separate Compensation for Rest Breaks and Non-Productive Time Required for Non-Exempt Commissioned Employees

by Jackson Lewis P.C. on

On February 28, 2017, in Vaquero, et al. v. Stoneledge Furniture LLC, the California Court of Appeal, Second Appellate District ruled that Wage Order 7-2001 (mercantile industry) requires employers to separately compensate...more

Paying Most Sales Employees Purely on Draw and Commission No Longer Lawful In California

by Fisher Phillips on

Last month a California appellate court held that an employer violates California law by paying inside sales employees on a draw against commission. In Vaquero v. Stoneledge Furniture LLC, the court held that such a pay...more

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