I am a plumber who is paid a straight hourly wage of $15 per hour, but I also receive a commission of 10% of every time I go out to a job. When I work overtime, my paychecks don't add up. How is my overtime supposed to be calculated?

The Texas fair overtime lawyers at our office handle this issue on a regular basis. In fact, we have helped many employees - who work on commission but were unfairly paid their overtime - receive the back wages to which they were entitled.

Calculating overtime for commissioned employees starts with determining the regular rate of pay. The regular rate of pay should be determined by taking the normal hourly wage, adding in any commissions or bonuses earned during the week, and dividing that number by 40 hours.

The overtime rate should be one and a half times the calculated regular rate of pay mentioned above.

The most common problem for many commissioned employees - including plumbers - occurs when the employer calculates overtime as one and a half times the normal hourly rate. They fail to add the additional commissioned earnings into the calculation, which results in hundreds or even thousands of dollars missing on paychecks over the course of a year.

Let's take a look at how your overtime should be calculated, assuming you have an hourly rate of $15/hour, went out on ten $100 jobs in one week, and worked 43 hours.

Correct:
$15 x 40 = $600 straight pay
10 jobs x $100 each x 10% = $100 commission
$600 + $100 = $700
$700 / 40 hours = $17.50 regular rate of pay
1.5 x $17.50 = $26.25
$26.25 x 3 hours of overtime = $78.75
Total pay for week: $600 + $100 + $78.75 = $778.75

Incorrect:
1.5 x $15 = $22.50
$22.50 x 3 hours of overtime = $67.50
Total pay for week: $600 + $100 + $67.50 = $767.50

While the difference between the correct and incorrect ways of calculating overtime is only $11.25, and may not seem like that much money, it adds up to $585 of unpaid overtime wages over the course of a year.

To learn more ways to protect your paycheck, contact Kennedy Hodges for your free copy of The Ten Biggest Mistakes That Can Hurt Your Wage and Overtime Claim by calling 888.449.2068. You can also fill out our online form to schedule your complimentary case evaluation. Protect your paycheck and call today.