The Fair Labor Standards Act governs overtime pay standards for commissioned sales employees in Florida, which has its own minimum wage laws. Florida also has statutes relating to commissioned sales workers who are not employees.
Exempt From Overtime
Commissioned outside sales employees in Florida, as defined by the FLSA, are exempt from the act's minimum wage and overtime pay requirements. This includes employees who use physical contact to sell products or services off the employer's property, such as a traditional door-to-door salesperson. Exempt outside salespeople do not have to be paid at the federal minimum wage, or overtime if they work more than 40 hours in a week. This rule stands regardless of whether they are paid fully, or in part, by commissions.
Commissioned inside salespersons employed by retail or service establishments, as defined by the FLSA, are exempt from overtime requirements but not the minimum wage. To qualify for the overtime exemption:
- The employee's regular pay rate, including commissions, must be more than one and one-half times the minimum wage
- Commissions must make up more than half of her total pay.
The FLSA narrowly defines exempt standards for salespersons, so examine the requirements carefully before classifying employees as exempt.
A commissioned sales employee who does not meet FLSA minimum wage or overtime exempt requirements is nonexempt. Inside sales employees generally are nonexempt, for example, except for those who work at retail or service establishments. Commissioned nonexempt salespeople in Florida must receive:
- No less than the federal or state minimum wage, whichever is higher. As of publication, Florida's minimum wage is $8.05 per hour, and the federal minimum wage is $7.25 per hour.
- Overtime wages if they work more than 40 hours in a week.
The FLSA has specific rules for calculating overtime for commissioned employees. The computation method depends on whether the employee receives straight commissions, commissions plus hourly pay, or commissions and salary.
The FLSA does not oversee the collection of unpaid commissions, only wages that are within the scope of its requirements, such as unpaid minimum wage or overtime. To recover unpaid minimum wage or overtime, the employee may file a wage claim with the United States Department of Labor, Wage and Hour Division. She also can file a private lawsuit for unpaid commissions. According to the website of Arcadier and Associates, a law firm in Florida, commissions are regarded as wages in the state and may be recovered by claiming breach of contract.
Whether the agreement was made in writing or orally, unpaid commissions are recoverable, provided the employee can prove that the commissions were earned while she was employed.
Florida statutes provide some protection for salespersons who are not employees and who are paid fully or in part by commissions. When someone hires a sales representative in the state to sell goods or services, the contract should be put in writing and must state how the commission will be calculated and paid. The hiring party must give the salesperson a copy of the contract.
Commissions should be paid according to the terms of the contract. If a contract ends and was not put in writing, the hiring party has 30 days after the contract termination date to pay commissions due.