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Ask the Lawyer By: Daniel A. Gwinn, Esq.

| October 30, 2016

Dan Gwinn New Head ShotWORKING FOR STRAIGHT COMMISSION BUT MAKING LESS THAN MINIMUM WAGE? YOU MAY HAVE A CLAIM.

QUESTION:  I work for a direct sales marketing firm. I am required to come to the office and work 40 hours per week, making cold calls. I am paid on straight commission, receiving 20% of the sales, once our product is installed. So far, after three months, I have only earned $1,200. Is this legal? Shouldn’t I receive some kind of minimum wage?

ANSWER:     Sounds like your employer might be bending the law. Workers at businesses with gross receipts of at least $500,000 must, generally, receive at least the federal minimum wage of $7.25 an hour (in Michigan, that rate is $8.50/hour), unless they are “exempt” under the Fair Labor Standards Act.

While there are many exemptions to minimum wage and overtime requirements, to qualify for most of these exemptions, employees must meet certain tests for job duties. Exemptions from minimum wage/overtime are reserved for workers who have either a high level of skill (doctors, lawyers, film directors, writers) or some managerial control. It does not sound like your job is fits into either of these broad categories. Employees who are exempt must also be paid on a salary basis. In most of 2016, to be paid on a salary basis you would have had to receive a salary of at least $455 per week (this is jumping to $913 per week in December 2016). You say you didn’t receive a salary; so you are not an exempt employee.

While it is legal to pay a worker on a straight commission, the pay the worker receives in a given period – usually a week – must be equal to the minimum wage. Over three months, you‘ve received the equivalent of about $2.50 an hour. The Department of Labor punishes employers who shirk their legal obligation to pay workers a minimum wage, by allowing employees to recover double the amount of the unpaid wages. On top of this, the government can assess civil money penalties, paid to the government, against the employer.

Although you may file a complaint against your employer with the Department of Labor, you may wish to consult an attorney first, to go over the facts of your case, to help improve your claim’s chance of success.

The lawyers at GWINN TAURIAINEN PLLC are experienced attorneys and are happy to answer your questions. Give us a call for a free initial telephone consultation about your legal needs. For consideration of your questions in our web column, please submit your inquiry on the “Contact Us” page of our website at www.gwinntauriainenlaw.com.

ASK THE LAWYER
By: Daniel A. Gwinn, Esq.
Attorney and Counselor at Law
GWINN TAURIAINEN PLLC
901 Wilshire Drive, Suite 550
Troy, MI 48084
(248) 247-3300
(248) 247-3310 facsimile
daniel@gwinnlegal.com
www.gwinntauriainenlaw.com

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