Employers sometimes try to get out of paying employees overtime by paying them only on commission. However, this does not legalize paying the employees less than minimum wage or failing to pay overtime.
A California service provider, Premier Insurance Services, has allegedly done just that with about 90 employees working in the company’s 13 California locations. The sales agents were allegedly paid solely on commission with no “draw” or base pay. This allegedly led to many of the employees earning less than minimum wage in addition to working overtime without the proper overtime compensation.
According to the Federal Labor Standards Act (FLSA), employees can only be classified as exempt from overtime pay if their job description fits certain requirements. The employees must work in a professional, administrative, or executive capacity in order to qualify for overtime exempt status. Employers will sometimes misclassify employees in order to avoid paying them the proper overtime compensation but this is illegal and salespeople do not fit into any of the exempt categories provided by the FLSA. The employees at Premier Insurance Services therefore should have been paid at least minimum wage for each hour that they worked and no less than 1 and 1/2 times their normal hourly rate for each hour that they worked in excess of eight hours a day and forty hours a week.
Premier Insurance Services has settled the case for almost $120,000. Of that amount, about $33,000 represents various civil penalties for the illegal employment practices. The company was also mandated by the US Department of Labor to sign an agreement, which required the firm to implement a proper timekeeping system to facilitate the recording of the time employees spend working.
It seems these alleged illegal practices may originate from the top of the ladder. Speedlane Insurance Services of Upland was found in a 2012 overtime lawsuit to have committed similar violations of overtime and wage and hour pay. Speedlane was mandated by the US Department of Labor to pay about $200,000 in back wages to 96 employees. The statement by the Department of Labor revealed that Speedlane was owned and operated by a close relative of Hakim Kabir, who was identified as the owner of Premier Insurance Services.
The attorneys at the Chicago Overtime Law Center are investigating unpaid overtime claims against, insurance broker and agencies, mortgage brokers and banks for misclassifying loan officers as managers, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim this practice call us at (312) 869-4095 or contact us online.
The lawyers at the Chicago Overtime Law Center have decades of experience fighting for wage earner’s rights. We have a team of Chicago unpaid overtime attorneys who focus on nationwide class action lawsuits and work out of Chicago and Oak Brook offices and prosecute claims for workers all over the Chicago area including Schaumburg and Woodstock. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, McHenry Kane and Cook Counties.
Our Skokie, Lincolnwood and Evanston overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers misclassify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.
The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have not been paid for the overtime hours that they worked. If you believe that you are owed overtime wages, contact one of our Chicago class action attorneys by phone at (312) 869-4095 or through our online form.