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Commission based pay and minimum wage laws.

Discussion in 'Business Operations' started by trimmasters, Jan 13, 2002.

  1. trimmasters

    trimmasters LawnSite Senior Member
    Messages: 264

    Hi, I was wondering how and if minimum wage laws apply regarding commission based pay?

    A An employee must make minimum wage or above every hour in commission?

    B An employee must make an amount that equals or exceeds minimum wage per pay period? ( I.e., One works for 40 hours, the amount of commission divided by 40 hours must equal minimum wage or above)

    C Minimum wage laws do not apply to those on commission-based pay?

    If someone could tell me how it works it would be greatly appreciated
  2. Turfdude

    Turfdude LawnSite Bronze Member
    Messages: 1,899

    I believe that labor type of employment has to be paid by the hour. You can not pay less than minimum wage. I don't know any LCO paying only min. wage to their employees. If yu are talking about a sales position, that could be salaried or commissioned. If you are going to put your labor employees on a set salary, then there are some legalities involved. Check w/ the labor board for verification, but you better have the employee sign some sort of contract disclosing terms and also still keep a time card to track their hours. I know of a few LCO's doing this and all is okay as long as the employee lasts the full season and the amount of hours worked fall in the range specified under the contract.

    Personally, I'm against this as I got burned by a family member. I had an agreement of paying for 45 hrs a week from start of season to end of season for $550/week. If for whatever reason, at end of season average was over 45hrs, then there would be a $500.00 bonus for every hour over 45. This may not sound like a lot, but it was 3 years ago and the only responsibility was running a maintenance crew. No applicator license, no heavy landscaping and no mechanical work. After working March 1- August 28, Average hours/week were under 39!!!! Think I got SCREWED?????

    Never again!


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