Commissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and *must be included in the regular rate*. This is true regardless of whether the commission is the sole source of the employee's compensation or is paid in addition to a guaranteed salary or hourly rate, or on some other basis, and regardless of the method, frequency, or regularity of computing, allocating and paying the commission.

29 C.F.R. § 778.117.

For example, if a mortgage loan officer worked 50 hours per week but only recorded 40 hours, was paid $10 per hour for those 40 hours ($400), and earned $500 in commission during that week, his/her regular rate of pay is $900 ($400 +$500) divided by 50 hours, or $18/hr. For every hour worked over 40 during the week, the overtime rate is one and one-half times $18 per hour, or $27 per hour. The total overtime pay due in that example is 10 hours x $27 = $270. Calculating overtime correctly makes a big difference in the value of an FLSA claim. If you are being asked to work off the clock, or you think your employer is not calculating your overtime correctly, contact Zenner Law, PLLC.]]>