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Small Business Hourly + Commission; Non-payment of hours worked

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TheInfluencer

Junior Member
What is the name of your state (only U.S. law)? North Carolina

My wife is one of two employee's for a small boutique shop in town. She is considered the manager and is hourly. The business pays her an hourly wage pays her a commission of 2% of store sales she makes plus 10% of all online sales.

They recently had her sign a commissions contract that states a daily online sales goal plus her other responsibilities such as making the hand-made garments, posting/running the online sales, scheduling, etc.

One of the stipulations in the contract is "no hourly rate will be paid for after hours online work, commission is compensation". The owners told her that her commission is her payment for after hour work and they expect her to work from home at night to make the daily sales goals as the majority of her time at work is spent making clothes and dealing with retail sales.

I know that Federal laws only apply if the company is considered interstate commerce. A lot of the online sales do go out of state, almost all of the pre-made garments and toys are ordered and shipped from out of state, materials for the hand-made garments are bought in-state.

Is it legal for them to not pay her an hourly rate for the at-home/after hours online work or to require her to do so?
 


cbg

I'm a Northern Girl
That depends.

At the end of the week, her paycheck MUST reflect minimum wage times however many hours she worked. The Feds, and all states except California, do not care how much of that is hourly wage and how much of it is commission. If the total at the end of the week equals minimum wage times hours worked, the law will consider that she has been paid correctly.

If it does not; if she has not earned enough in commission to come to that total, then the employer is required to make up the difference.
 

TheInfluencer

Junior Member
Alright, so to make sure I'm clear. If she works 30 hours in store and 10 hours out of store after hours doing online sales, her pay would have to equal 290, or 7.25 x 40, before taxes. So if she makes $8 an hour, her hourly wage would be $240, so if her commission was $40 the employer would have to make up the $10 difference.

If she worked the same 30 in store and 20 after hours online, would the commission and hourly wage have to equal that 290 + 108 for time and a half for the 10 hours worked over 40, going off of 1.5 times minimum wage? I think I read that somewhere while trying to research this myself.

I'm just trying to make sure they don't put one past her as every time she has a really good commission week there is some reason from her employer why it's too high and then a new rule comes up.
 

cbg

I'm a Northern Girl
If I'm reading you correctly, yes. Since she is not doing outside sales she is non-exempt by definition, which means, at least in this case, that both minimum wage and overtime laws apply.
 

TheInfluencer

Junior Member
If I'm reading you correctly, yes. Since she is not doing outside sales she is non-exempt by definition, which means, at least in this case, that both minimum wage and overtime laws apply.
What do you mean by outside sales?

Basically what her employer wants is for her to run the store during business hours which would be about 30 hours a week. During this time she is to pick merchandise for the online "flash sale", make the handmade garments, and put the items up for sale on the website and social media.

Then the employer expects her to work from home on her computer to push the flash sales, answer questions, refer people to the website & social media pages and process any purchases to log them in the POS system.

I personally find it absurd that she can be forced to work after hours potentially lowering her hourly wage to minimum without being compensated, seems to me the law would make sure you make atleast your agreed hourly wage. But the law is the law so no point arguing that, just want to make sure she doesn't end up working for $4 an hour because of the after hours work.

It seems petty seeing as we're talking about a possible loss of less than $100, but if they plan on taking away time with the family to further their sales outside of business hours, I want to make sure she's atleast getting paid for it.
 

cbg

I'm a Northern Girl
Outside sales - going from client's location to client's location building up a client base.

She is entitled to minimum wage (the higher of state or Federal, if different) and overtime if she works over 40 hours in a week. The law will enforce that. Anything over and above that is between the employer and the employee as far as the law is concerned.
 

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