A quarter of what I earn from my New York retail job comes from commissions. Does this mean that my employer can classify me as exempt?

No!

Under New York law, exemptions for retail employees are treated somewhat differently than exemptions for low-level workers in other industries (energy, medical services, restaurants, etc.) That's because many, but by no means all, retailers pay at least some of their employees on a commission basis in addition to a regular hourly salary. Under this law, a retail employee can be classified as exempt only if two conditions are met:

  1. Her pay rate including overtime amounts to at least $10.87 per hour (1.5 times the current federal minimum wage); and
  2. More than half of her total wages during any representative period consists of commissions.

As you can guess, crafty employers can make hay with that “representative period” wording above. In a good week, you may derive 50 percent of your pay from commissions, but that may even out to 25 percent over the course of a month or year. Your employer may be able to classify you as “exempt” based on what turns out to be a very unrepresentative time period; and this exemption excuses management from having to pay you extra for overtime.

Of course, many retail stores don't even try to adhere to New York state law when classifying employees, which is how so many minimum-wage shelf-stockers—with no chance of earning any sort of commissions—wind up as “exempt.”

Questions? Call the experienced overtime attorneys at Kennedy Hodges LLP for a free consultation! We accept clients nationwide. One call to 888-449-2068 can get you on the road to recovering what you owe from the New York back wages cheaters you worked for. Not only can we work to get you the back pay you deserve, we can ask for a fine to be levied against your New York employer caught violating U.S. labor laws.

Galvin B. Kennedy
Galvin Kennedy is a founding partner of Kennedy Hodges. He focuses his practice to overtime and wage claims.