Are you eligible for overtime pay in New York if your employer pays you in part or in full by commissions? While it is true that, depending on the circumstances, your employer may be exempt from offering overtime pay to commissioned employees, this exemption is only available if the employee meets certain requirements.
As outlined by the Department of Labor, there are three basic conditions that a retail or service establishment must meet in order to claim the exemption for overtime pay outlined in the Fair Labor Standards Act.
Conditions for overtime exemption
- In order to be exempt from the FLSA overtime requirements, an employee has to work for a retail or service establishment. This means that 75% of the businesses annual dollar volume of sales comes from goods or services not offered for resale.
- An employee must make more than half their total earnings from commissions.
- The rate of pay (which includes commissions) must be greater than one and one half times the lawful minimum wage for every hour worked during a week that includes overtime.
Employees must meet all of these conditions in order for the overtime exemption to apply. According to these conditions, whether or not you are eligible for overtime may also vary from week to week.
If you are earning commissions, your employer needs to make sure that they are keeping accurate records of the hours you worked each week and your paid earnings and wages. Your employer needs to also choose a representative time period that is at least one month, but not longer than a year, to assess the aforementioned and determine whether or not they must pay overtime.