How do I compute the regular hourly rate of pay if my commissioned employees do not qualify for one of the above exemptions?
A. Most employers are subject to federal law that requires them to include commissions in the regular rate. To compute the regular rate, add the commission earnings to any other earnings for the week and divide by the number of hours worked in that workweek. For example, if an employee is paid $100 as a flat rate, and is also paid commissions for $300 for 38 hours of work, then: $100 plus $300 = $400 $400 divided by 38 = $10.53/hour is the regular rate Since the employee did not work over 40 hours, no overtime is due. If the employee had worked 43 hours, the regular rate would be $400 divided by 43 equals $9.30. An additional half-time is due for the three overtime hours. $9.30 divided by 2 x 3 = $13.95 Note: Since the employee had already received straight time earnings for all hours worked, only an additional half-time is due for the overtime.
Related Questions
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