At Leeds West Groups, many roles are compensated under commission-based or “either/or” pay structures designed to reward performance while ensuring compliance with wage and hour laws.
Quick Answer
For roles with an Hourly OR Commission pay structure, your pay for each pay period is the greater of your total hourly earnings or your total commission earnings. All commission-based roles are also subject to 7(i) overtime exemption testing, as required by law.
How Either/Or Pay Structures Work
Each pay period, payroll compares:
-
Hourly Pay:
Hourly rate × hours worked (plus overtime, if applicable),
OR -
Commission Pay:
Calculated based on the applicable commission plan for your role.
You are paid whichever amount is higher for that pay period. This comparison is performed automatically each pay period.
Commission Pay and the 7(i) Overtime Exemption
All commission-based team members are subject to 7(i) exemption testing under the Fair Labor Standards Act (FLSA).
This means:
-
Commission-based roles are reviewed to determine whether they qualify for the 7(i) overtime exemption during specific testing periods.
-
When the exemption applies, overtime pay is no longer required, even if more than 40 hours are worked in a pay period.
-
When the exemption does not apply, overtime is paid in accordance with applicable law.
Important Things to Know
-
Commission earnings can vary from pay period to pay period based on performance.
-
Your pay outcome may change depending on whether hourly pay or commission pay is higher in a given pay period.
-
7(i) exemption status is not permanent and may change over time based on testing results.
-
Commission rates, calculations, and eligibility are defined in the applicable commission or pay program for each role.
If You Have Questions
If you have questions about:
-
How your commission is calculated
-
Whether you are on an Hourly OR Commission pay plan
-
How 7(i) testing affects your overtime eligibility
Please reach out to your supervisor or Human Resources for guidance.
