Opinion ID: 6334214
Heading Depth: 2
Heading Rank: 2

Heading: The FLSA

Text: ¶ 8. The FLSA does not directly address the draw-on-commission plan involved here. Rather, it requires employers to pay a minimum wage of at least $7.25 an hour and mandates that overtime wages are to be paid for all hours worked more than forty hours a week at “one and onehalf times the regular rate at which [the employee] is employed.” 29 U.S.C. §§ 206(a)(1)(C), 207(a)(1). In turn, the FLSA defines the “regular rate” as “includ[ing] all remuneration for employment paid to, or on behalf of, the employee.” Id. § 207(e). ¶ 9. Employee is effectively arguing that she did not receive compensation under § 207(a) for her overtime hours because not only was the bank required to use her gross commissions to calculate her regular rate, but the FLSA also required the bank to pay gross 4 commissions in their entirety. However, the term “gross commission” does not appear in § 207, and the word “commission” appears only in an unrelated part of § 207(i). See Dean v. United States, 556 U.S. 568, 572 (2009) (“[W]e ordinarily resist reading words or elements into a statute that do not appear on its face.” (quotation omitted)). On the other hand, § 207 defines regular rate and prohibits employers from employing “any of [its] employees” who work more than forty hours a week without overtime pay calibrated to the regular rate. Id. § 207(a). Thus, § 207 does not prohibit employers from deducting overtime wages from gross commissions because it does not mandate the payment of gross commissions at all. It simply requires that “all remuneration” is included in calculating the regular rate. Id. § 207(e). The regular-rate calculation ensures that employee receives her overtime wages at a rate that reflects her true hourly earnings, not that she receives her overtime wages in addition to her gross commissions. ¶ 10. Indeed, whether gross commission equals the base pay for calculating overtime wages depends on the contract and is not mandated by the FLSA. See, e.g., Reinig v. RBS Citizens, No. 2:15-CV-01042-AJS, 2017 WL 8941217, at  (W.D. Pa. Aug. 2, 2017) (reasoning draw-on-commission plan permissible where net commissions used to calculate regular rate as opposed to gross commissions). Employee agrees that the bank calculated her regular rate using gross commission. In fact, employee agrees with the bank’s payment calculation except for the overtime wage deduction from gross commission. As the superior court demonstrated in some detail below, such a draw-on-commission plan only violates § 207 if employee’s statutorily required minimum compensation exceeds her gross commission in a given week and the bank does not make up the difference. That never occurred here.