In a recent decision,
Alvarado v. Corporate Cleaning Service, Inc., a federal judge for the Northern District of Illinois determined that
window washers may proceed against their employer with a claim for overtime
benefits under the Fair Labor Standards Act (FLSA).
The FLSA provides that all employees who are not exempt from the FLSA must
be paid overtime benefits at a rate of one and one half times their regular
rate of pay for all hours worked in excess of 40 hours in a work week.
Alvarado, the window washers often worked between 60 and 70 hours per week, but
never received overtime premiums. Despite the employees’ demands
for payment, the employer asserted that the window washers were exempt
from the FLSA because they were partially paid on a commission-based compensation
system. Under the FLSA, employees who receive more than half their compensation
in the form of “commissions on goods or services” are generally
not entitled to overtime payment.
Determining whether a “commission-based” compensation scheme
exists is not always clear-cut. Case law has found a commission-based
system exists where compensation is linked to the price charged to the
consumer for the good or service being sold and where compensation is
“related to the value of the service performed.”
Although some evidence indicated that the window washers were paid a commission
– i.e. the window-washers were paid on a point system rather than
an hourly wage – additional evidence showed that the employer was
inconsistent in charging customers in this manner. As a result, the federal
judge denied the employer’s motion for summary judgment and allow
Overtime premiums can be a significant source of extra income. In order
to avoid paying these premiums, some employers may try to mischaracterize
how you are paid, your job classification or your rate of pay. For more
information or if you believe your employer has denied you overtime compensation
you deserve, please contact The Buckley Law Firm, LLC, a Georgia law firm
dedicated to protecting employee’s rights.