Commissioned retail or service sales exemption to overtime payment

posted by Neil Klingshirn  |  Jul 11, 2009 4:20 PM [EST]  |  applies to Ohio

Employment by a retail or service establishment


Employees of a retail or service establishment are exempt from overtime if:
  1. their regular rate of pay is at least one and one-half times the federal minimum wage ($7.25 after July 24, 2009), or $10.86 an hour; and
  2. more than half of their compensation is from commissions on goods or services.
29 USC 207(i).

The retail or service establishment commission exemption does not apply to employees of financial firms paid by commission, such as loan officers.

In 1959 the United States Supreme Court expressly held that enterprises in the financial field, such as banks, credit companies and personal loan companies, do not qualify as a “retail or service establishment” within the meaning of this exemption. Although Congress amended this exemption since then, it made clear that it did not intend the exemption to apply to financial service companies. Likewise, the DOL has long interpreted this exemption as not covering financial service firms.




posted by Neil Klingshirn  |  Jul 11, 2009 4:20 PM [EST]  |  applies to Ohio

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