Twenty states have raised their minimum wage since Dec. 31, and the World Floor Covering Association is reminding the industry that the increases may also impact the pay for commissioned salespersons and salaried employees—even if a flooring business already pays more than the minimum.
Twenty states have raised their minimum wage since Dec. 31, and the World Floor Covering Association is reminding the industry that the increases may also impact the pay for commissioned salespersons and salaried employees—even if a flooring business already pays more than the minimum.
“A commissioned salesperson is exempt from minimum wage and overtime pay, only if over half of the employee's total earnings must be from commissions, and the salesperson’s total earnings from commissions and base salary adds up to an effective hourly rate that is more than one and one-half times the state minimum wage,” WFCA stated. “Any increase in the minimum wage, therefore, will automatically increase the minimum total compensation required for commissioned sales.”
A rise in the minimum wage may also affect the salary test for administrative and management employees who are exempt from overtime, as some states, such as California, set the salary test as a multiple of the minimum wage.
“In California, a supervisor classified as exempt must be paid a monthly salary that is no less than two times the wages paid to a full-time minimum wage employee,” according to WFCA. “There may be a number of other consequences from the increases of the minimum wage, such as increasing meal and lodging credits.”
A list of states that raised their minimum wage for 2021 can be found here.