Non-exempt to Sales/Commissioned/Exempt

TeresaBlank

We currently have 3 employees who support our main sales staff. We are wanting to promote them, making them non-exempt employees and allow them to receive a commission. Is this allowed?

awilliams

Teresa,

As you probably know, in order to consider an employee to be "exempt" from overtime pay, and therefore be paid salary, the person must fit into an "exempt" position, which in your case would most likely be either as professional, executive, or administrative. You cannot merely re-classify a person, unless their job duties change significantly such that they fit into the exempt position. It appears that your assistants might fit into the administrative exemption, however, they must meet a strict test that requires that they use independent discretion and judgment in their work, make a minimum of $155 per week, and do not spend more than 20% of their time on non-exempt work.

To find out more about this situation, check out or Special report entitled, Defusing the Overtime Bomb: How to Comply with the FLSA. You can find it on this website.

Anne Williams

Pork

Teresablank: May I suggest you contact your local wage/hour folks and ask for a "free" copy of Regulations Part 541. In this little booklet you find the parameters for identifying and assigning appropriate sales task to their job description. Given that you can't do that, then I suggest you turn to Regulations Part 785 and Part 778.331 & 778.332,(all of which are free from your friendly wage and hour folks) this reading could be the answer "Awards for activities not normally part of the employee's job. 778.114 "Fixed salary for flucating work week" could also be a means of setting a salary which includes overtime and provides a constant weekly rate for the support duties they may provide in the sales arena. Basicly, you set a salary for work not to exceed x number, like 50. 40 hours at regular time and 10 hours at overtime. If they work less than the 50 hours you are good to go and you are not inviolation, if they work less 40 hours you accept the efficiency gained and look for the next weeks hours, etc. If they work more than 50 hours then your company owes them for the additional hours worked. The formula is in the booklet. I hope this helped, Pork!