The regular rate and commissions. Part Last.

That’s a couple of weeks just talking about how commissions can affect the regular rate. That seems like a lot, doesn’t it? Well, this is the last time – in fact this is the last time in something like 10 or 12 posts that we will be talking about adding things to the hourly rate to get to the regular rate. So what do we have left? Well, just a couple of minor points that will wrap all of this up. The first deals with delays in computing commission payments. The DOL recognized that the business world does not run in nice neat little time chunks. So they understood when they drafted these Regulations that especially with commissions you could not expect to wrap it up all in one neat little package. So?

If there are delays in crediting sales or debiting returns or allowances which affect the computation of commissions, the amounts paid to the employee for the computation period will be accepted as the total commission earnings of the employee during such period, and the commission may be allocated over the period from the last commission computation date to the present commission computation date, even though there may be credits or debits resulting from work which actually occurred during a previous period. The hourly increase resulting from the commission may be computed as outlined in the preceding paragraphs.

29 CFR § 778.121.

Basically, you get a break, and if, after you have computed and allocated commission payments for your defined period, there are changes due to, say, payments not being made, or bounced checks or some other thing that would change the commission, you don’t have to go back and do it all over again. You can allocate those changes to the new period even though the work was done in the last period.

And last, and what I would consider really rare, you can use a basic rate for employees paid wholly or partly on commission. Go here for a discussion of the basic rate. And here is that Reg:

Overtime pay for employees paid wholly or partly on a commission basis may be computed on an established basic rate, in lieu of the method described above. See §778.400 and part 548 of this chapter.

29 CFR § 778.122.

Next time we are going to move into Part C of Section 778 of the Regulations and start talking about some things you get to exclude rather than include in the regular rate. And next time, I have a surprise for you.