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When Are Sales Employees Entitled to Overtime Wages?

Posted on behalf of Peter T. Nicholl in Unpaid Overtime May 28, 2019

sales employees owed unpaid overtimeIn recent weeks, some of the nation’s largest manufacturers and sellers of mobile homes have come under fire for exploitative and predatory consumer practices. Numerous reports have outlined how some of the country’s largest and most powerful companies, like Warren Buffet’s Clayton Homes, have been able to maximize their profits by raising rent and interest rates on low income families.

While these reports do a great job of outlining how these billion dollar companies mistreat their customers, it begs another question: how do they treat their employees?

To run their companies, sellers of mobile homes typically employ teams of sales persons, often called “home sales consultants.” These employees are routinely required to work long hours, including weekends, in order to contact prospective buyers.

However, instead of paying these employees overtime, many companies classify these workers as “exempt,” leading them not to be eligible for overtime wages. These employees are typically paid a low base salary and some commission payments. Similar to many workers in a variety of other industries, these employees are often told that because they earn a salary, they are not entitled to overtime wages.

What these employees are not told is that under federal law, they may be owed overtime wages. The Fair Labor Standards Act (often referred to as the “FLSA”) only exempts workers from the overtime requirements if they meet specific tests regarding: 1) how they are paid and 2) the job duties they perform.

For home sales consultants and other inside sales employees who make commissions, the FLSA requires that at least fifty percent (50%) of the employee’s earnings must derive from commissions. If fifty percent (50%) of the employee’s pay does not come from commissions, he or she must be paid overtime wages for all hours worked over forty (40) in a workweek.

For example, if a sales consultant receives $25,000.00 in salaried payments within a calendar year and only $20,000.00 in commissions that same year, the employer is required to pay the sales consultant an additional amount in overtime wages.

Many sales consultants, including those who sell mobile homes, do not earn enough in commissions to meet the FLSA exemption. Nonetheless, they still often fail to receive overtime wages, despite working overtime regularly.

If you work or worked in a sales position for a mobile home company and did not receive overtime compensation, contact us for a free consultation.

Contact our personal injury lawyers for a free consultation if you have been injured by another’s negligence. You may be entitled to compensation.

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