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Like all compensation methods, piece rate compensation plans – under which an employee is compensated based on the number of “pieces” he or she generates or completes – must be analyzed for wage-and-hour compliance. For example, under federal law, minimum wage generally is due for all hours worked, and there are recordkeeping obligations, although some…

This blog has stressed (most recently here and here) the importance of carefully drafting incentive compensations plans to avoid unintentionally converting incentive compensation into earned “wages” protected under state law.   Another recent decision, this one from the Court of Appeals for the Seventh Circuit reinforces the employer benefits of careful drafting. Lawson v. Sun…

As we recently noted in our discussion of Massachusetts law, incentive compensation has the potential to become “wages” protected by state labor law once it is “earned.” However, when an employer conveys to the employee that it retains discretion to award or not award incentive compensation in any specific amount, such potential incentive compensation…

As we recently discussed, while the FLSA does not regulate the payment of incentive compensation (such as, for example, commissions and bonuses), many state laws do.  In Nebraska, an employee’s right to commissions is governed by a recently amended statute, Nebraska Revised Statute § 48-1229(4).  A new decision from that state’s highest court addresses…

Identifying two separate bases for finding a motorcycle mechanic ineligible for overtime under the FLSA, Judge Federico A. Moreno granted summary judgment to the Ducati dealership where the mechanic worked, Ducati Miami.  Henriquez v. Total Bike, LLC, 2013 U.S. Dist. LEXIS 179592 (S.D. Fla. Dec. 20, 2013).

In challenging his exempt status, Henriquez first…

An unsettled fertile area of litigation in New York has been the circumstances under which various types of incentive compensation—such as bonuses—become “earned” as wages and thus entitled to the protections of the New York Labor Law, which provide greater remedies than common law claims for breach of contract.  In a recent decision, New York’s…

As discussed repeatedly in these pages and elsewhere, employers have faced innumerable lawsuits regarding their alleged failure to distribute amounts purported to be gratuities to service staff in their entirety. However, even distributing tip money dollar-for-dollar to service providers is not a panacea against wage claims, as highlighted in a new opinion issuing from the…

Pursuant to New York State Department of Labor guidance and New York case law, incentive compensation is not considered “wages” unless it is “earned.” See generally Truelove v. Northeast Capital & Advisory, Inc., 95 N.Y.2d 220, 225 (2000). Accordingly, disputes over an employee’s entitlement to incentive compensation in New York often turn on whether a…

As we have previously discussed, the FLSA contains an exemption for commissioned employees in the retail or service industry who meet certain parameters: colloquially referred to as the “7(i)” exemption. California has a similar exemption which the California Court of Appeal, Second Appellate District recently applied to a sales consultant, holding that Defendant’s payments qualified as…