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John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 4468
Experience:  Exclusively practice labor and employment law.
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The NCDOL has sent me a citation stating that I owe an

Customer Question

The NCDOL has sent me a citation stating that I owe an ex-employee $1955.98 in back wages and interest. This employee was hired at $17.80 per commission hour. According to what I've always known that means: when we get a job in for say, Allstate, State Farm, Geico, etc they give or allow say 3 hours to paint a fender at my labor rate of $44 per hour. That means I pay my collision guys (this guy was the painter) at the rate I hired them (he was hired at $17.80 pr hr) which I would pay him the 3 hours to paint that fender wether he took 1 hour or 4 hours to do it. The labor board is saying that I cant do that although every shop in NC pays their commission guys that way.
JA: Because employment law varies from place to place, can you tell me what state this is in?
Customer: North Carolina
JA: Have you talked to a lawyer yet?
Customer: no
JA: Anything else you think the lawyer should know?
Customer: When this guy would turn in his total time for the week, say 25 hours, sometimes I'd bump it up to give him more pay. The North Carolina Department of Labor investigator says that I'm required to pay him time and one half above 40 hours (which would be 26.70 per hour) That's over half my hourly labor rate! All my professional life I've always been paid this way: If I have a job that pays 20 hours and I can get it done in 5, then I get paid for 20. the potential is that I can make say, 75 hours, etc. in a " 40 literal hour week" then I've make my overtime "before" I reach 40 hours.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Employment Lawyer about your situation and then connect you two.
Submitted: 3 months ago.
Category: Employment Law
Expert:  John replied 3 months ago.

The way you pay him isn't necessarily illegal, but it is illegal if you promised an hourly wage and didn't live up to that in some weeks. IN other words, the law requires only two things - 1) that you pay at least minimum wage per hour and 2) that hours in excess of 40 per workweek be compensated at time and a half. But, if you go above and beyond the law and promise a guaranteed hourly rate that is in excess of minimum wage, you have to live by that and pay overtime based on at least that rate. I agree you pay basically the same way every auto service place pays, which is by the service, but you cannot promise an hourly wage at the same time and not pay at least that amount plus overtime based on that rate.

The correct way to pay would be by the job, without a promised hourly rate, and generally they will do the work expediently enough to at least make minimum wage (7.25 an hour). Then if they go over 40 hours on the week, you need to make sure the hours in excess of 40 are compensated for the average hourly rate X 1.5 for that work week. You need to not only track the estimated labor hours per job, but also actual hours worked. Then, if overtime occurs you divide their total compensation for the week by actual hours worked - this is the hourly rate for the week, then you multiply that times .5 and pay that extra for those hours over 40.

Does this make sense? It's a relatively complex subject.

Expert:  John replied 3 months ago.

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