Wednesday, 12 September 2018 14:51

ASA’s Attorney Discusses Overtime Laws

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“Employers should ensure that regular payments to employees are not considered salary payments. The best way to do this is to carry forward any deficits (amounts by which draws exceed commission), and charge them against future commissions,” Farrington suggested. “For instance, say the commissions had been $9,000 for the quarter. There is a $100 deficit, so it gets carried forward to the next quarter and subtracted from Quarter 2’s commission.


“Under this system, a fixed number of hours are attributed to a particular job, regardless of how long it actually takes to do the job. The customer pays for the number of hours to the shop at the labor rate, and the technician receives money so what they receive is a function of what the customer pays, and that’s a commission. A painter or mechanic may work for seven, eight or nine hours in a day and still receive credit for 10, 11 or 12 flat rate hours, depending on how much work is done and regardless of the actual time it takes to complete a certain job.”


As his presentation came to a close, Farrington emphasized the importance of engaging legal counsel that is familiar with your specific state’s legal requirements.


Molla stated, “Ignorance of the law is no excuse. Seek competent legal advice when in doubt.”


For more information on ASA, visit asashop.org.

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