Jordan’s Furniture’s commissions-based compensation scheme for its sales employees violated the overtime and Sunday pay statutes.
The plaintiffs argued that Jordan’s pay plan did not comply with either of the mandates in a 2019 decision because salespeople did not receive separate and additional payments for overtime and Sunday hours. The company was reallocating and crediting payments made to fulfill one set of wage obligations against separate and independent obligations.
The Massachusetts Supreme Court said employers must make separate and additional payments to one hundred percent commission sales employees to compensate the employees for every hour worked over forty hours or on Sunday, and draws and commissions cannot be retroactively allocated to meet these requirements even if those commissions equaled or exceeded the minimum wage for the employees’ first forty hours of work and one-half times the minimum wage for all hours worked over forty hours or on Sunday.
The compensation scheme was ruled illegal because each week they worked Sunday or overtime, they were paid cash as required for Sunday or overtime hours. If they did not earn enough commission, the negative balance would be carried forward and deducted from future pay when the commissions available exceeded the minimum wage required to be paid. In other words, the employees took the loss if the commissions earned did not meet the minimum payment required by carrying the negative balance.
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