If the calculation and payment of the commission cannot be completed until sometime after the regular pay day for the workweek, the employer may disregard the commission in computing the regular hourly rate until the amount of commission can be ascertained. Until that is done he may pay compensation for overtime at a rate not less than one and one-half times the hourly rate paid the employee, exclusive of the commission. When the commission can be computed and paid, additional overtime compensation due by reason of the inclusion of the commission in the employee's regular rate must also be paid. To compute this additional overtime compensation, it is necessary, as a general rule, that the commission be apportioned back over the workweeks of the period during which it was earned. The employee must then receive additional overtime compensation for each week during the period in which he worked in excess of the applicable maximum hours standard. The additional compensation for that workweek must be not less than one-half of the increase in the hourly rate of pay attributable to the commission for that week multipled by the number of hours worked in excess of the applicable maximum hours standard in that workweek.
Notes of Decisions
Cited in
7
cases (
5 in the last 5 years), 2009–2024 · leading case:
Chin v. Tile Shop, LLC, 57 F. Supp. 3d 1075 (D. Minnesota 2014).
Chin v. Tile Shop, LLC, 57 F. Supp. 3d 1075 (D. Minnesota 2014).
“5, 2014) (granting, in part, plaintiffs’ motion to conditionally certify the collective action and holding that discovery must be complete in order to determine if 29 C.F.R. § 778.119 requires the court to use a different formula to determine the hourly rate of pay).”
Powers v. Centennial Commc'ns Corp., 679 F. Supp. 2d 918 (N.D. Ind. 2009).
“29 C.F.R. § 778.119 , which addresses not only late overtime payments, but their intersection with commissions, says: If the calculation and payment of the commission cannot be completed until sometime after the regular pay day for the workweek, the employer may disregard the…”
Mitchell v. NBT Bank, N.A. (Vt. Super. Ct. 2021).
· cites it 4× “29 C.F.R. § 778.119 . Ms. Mitchell’s focus on this calculation distracts her from the real question here: not how much overtime pay is required but instead what is the base pay to which overtime must be added to produce total statutorily mandated minimum compensation.”
Christie Mitchell v. NBT Bank, N.A., 2022 VT 17 (Vt. 2022).
“Employee argued this was mandated by 29 C.F.R. § 778.119 , the specific provision prescribing the method by which an employer must calculate overtime wages in a draw-on-commission plan.”
Ducharme v. Madewell Concrete LLC (D.S.C. 2021).
“Based on the regulations governing deferred commission payments, the hourly rate is calculated by dividing the commission allocated to each workweek by the total number of hours worked in each week.”
Merritt v. Texas Farm Bureau (W.D. Tex. 2023).
“(quoting 29 C.F.R. § 778.119 ). Merritt argues that his commission payments were not deferred because he received his commission payments on the next monthly pay day after Farm Bureau approved the application, accepted the payment, and issued a policy for Merritt’s customers.”
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