How Do You Calculate Overtime for Commission Workers?
Unlike salaried workers or hourly rate workers, pieceworkers and commissioned employees are paid according to their productivity. How much a worker accomplishes in a given week will determine their pay. Examples of these workers include telemarketers, artists and craftspeople, waiters, and seamstresses. In each case, workers are not paid for time, but for output.
According to the Fair Standard Labor Act, these workers must still make at least minimum wage, and they are still entitled to overtime pay. Calculating overtime for salaried workers and hourly rate workers is fairly straightforward—of course, that does not mean your employer will do it. But it is easy to calculate how much you are owed when you earn an hourly rate. Calculating overtime for commissioned work requires a few more steps, however.
According to the U.S. Wage & Hour Division, the steps to calculate commissioned overtime are:
- Add together all income, including production bonuses and waiting time.
- Divide by the total number of hours.
- Calculate the hourly rate of pay for the week.
- Multiply this rate by .5 and by the hours worked in excess of 40.
- Add the two sums together—this is the total earnings owed.
As an example, consider that a carpet cleaner has earned $500 at a piece rate for 45 hours of work, plus $40 in production bonuses. The total income is $540, which will be divided by 45 hours for an hourly rate of $12 an hour. Because the cleaner worked for 5 hours of overtime, he or she is entitled to an additional one-half the hourly rate ($12) for those 5 hours, or $60. Thus, the total amount owed to that cleaner, by California law, would be $600.
Reclaim Your Rightful Wages—Call (310) 986-2792
Calculating your overtime is not that difficult. If you earn a living on commission, you will want to familiarize yourself with this process to protect yourself. If your employer is not paying you the rightful wages for your time, contact our employment law firm Alan Burton Newman, PLC.
Our Harvard-educated wage-and-hour attorney recovers compensation for workers throughout Los Angeles County and Southern California. We handle cases entirely over the phone or email, so you can recover compensation without interrupting your daily routine.
Get started on your case today by scheduling a free, no-obligation case consultation with our firm.