Thanks for your patience;
an employer cannot use a flat rate basis to exempt a nonexempt employee from overtime.
Basically, the employer will take the hours worked that week (each work week is a separate week) and divide it by 40; any hours above 40 must be paid 1.5 times the regular rate.
If the employee is exempt, or is actually an independent contractor, then they do not need to be paid overtime.
There is a narrow exemption under section 7i of the FLSA which exempts certain employees that are incentive based, and the following requirements must be met:
1) The employee must be employed by a retail or service establishment;
2) The employee’s regular rate of pay must exceed one and one half times the applicable minimum wage under FLSA section 6; and
3) More than half of the employee’s total earnings in a representative period must consist of commissions on goods or services.
See 29 C.F.R. §§ 779.313-.324, 779.410-.420
Links to minimum wage, overtime wages, exempt/nonexempt/independent contractor information are below:
#6 - this has the flat fee exception
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