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Working off the Clock-Hourly Employees on Sales Commissions

May 1, 2019  |  Employment, Federal Labor Standards Act (FLSA), Know Your Rights, Working off the clock

Are you a non-exempt hourly employee or a non-exempt employee on a sales commission? Have you been required to work “off the clock”? Does your manager or supervisor pressure you into underreporting your hours or changing your timecards to avoid having to pay overtime? If so, your rights under the Federal Fair Labor Standards Act (FLSA) may well have been violated. 

On April 29, 2019, the federal Court of Appeals for the Sixth Circuit (covering Kentucky, Ohio, Michigan, and Tennessee) ruled in favor of hourly employees who worked on commissions in such a case.  In Pierce v. Wyndham Vacation Rentals, Inc., the employer required sales employees to underreport their hours or altered the employees’ timesheets to avoid paying overtime. The trial court found that the evidence showed that Wyndham violated the Act by “prohibiting Sales [employees] from recording or recovering overtime, despite working overtime, and by instructing sales managers to edit timecards to misrepresent the time that Sales [employees] worked to achieve that result.”

Many employees testified at trial that the average of the number of hours they worked each week ranged from 50 to 80 hours.  These hours included the employer’s requirement that employees (working on sales commissions) attend mandatory morning meetings, conduct sales tours throughout the day, and attend frequent late-night work and special events, often working six or seven days a week.

The Court of Appeals ruled that the evidence showed that Wyndham executed an across-the-board time-shaving policy that failed to compensate employees for the hours they worked and that such conduct violated the FLSA.  The Court accepted the testimony of representative employees to show overtime pay violations.  The Court rejected the employer’s reliance on the employee’s time reports as the evidence showed that those reports were not credible in light of the company’s policy of prohibiting reporting overtime and encouraging underreporting of hours.  Although the appeals court remanded the case to the trial court to recalculate damages, it upheld the finding that the company was liable for all underpayment of overtime.

The FLSA allows you to recover overtime wages for ALL the hours you work.  If the employer has intentionally violated your rights, you may be allowed to recover “liquidated damages.”

If you are affected by similar practices by your employer, you may contact one of our employment lawyers or the attorney of your choice to get advice regarding your rights.

The Court’s opinion can be found at:

http://www.opn.ca6.uscourts.gov/opinions.pdf/19a0081p-06.pdf

Author: Michael J. O'Hara