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#2090193 - 07/27/16 06:01 PM Loan Originator Compensation - Overtime
Miss Comply Offline
Member
Joined: Mar 2012
Posts: 81
Our loan originators are compensated hourly (at more than double the minimum wage) plus they make commission on all of the loans that are closed over an established threshold (i.e. $1M a month). The earned commission is then reduced by the amount they were paid for their regular and overtime wages in the month the commissions were earned. I was told that this was illegal to reduce the OT compensation based on a PNC wage lawsuit. I was able to find that in fact "PNC illegally deducted overtime compensation from subsequent commissions" but I still cannnot find guidance as to why this was illegal - it could just be the way PNC specifically had their agreements structured (which I am hoping for). Can anyone help point me in the right direction?

Thanks so much in advance!

Just as clarification by example:
Ms. Originator earned $4,000 in regular and overtime wages in July
Ms. Originator earned $10,000 in commissions in July (not paid until August)

In August $6,000 of commissions ($10,000 earned minus $4,000 wages) will be paid. What I was told (by an employee) is that we need to figure out how much of that $4,000 was in OT and not reduce the subsequent commission by that amount. This change could easily cost us $2,000/month - which will be really hard for the budget to absorb!! But I also want to make sure we're following the FLSA.
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Human Resources
#2090218 - 07/27/16 06:30 PM Re: Loan Originator Compensation - Overtime Miss Comply
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,294
Galveston, TX
Overtime pay and commissions are a complex issue. Commission are included in the calculation of the base rate of pay for overtime calculation and this may cost you a lot more than your projection of $2,000.

You probably need to get a skilled employment attorney involved. For more information, refer to this document:

https://www.dol.gov/whd/regs/compliance/WH1262.pdf
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#2090442 - 07/28/16 05:50 PM Re: Loan Originator Compensation - Overtime Miss Comply
Miss Comply Offline
Member
Joined: Mar 2012
Posts: 81
You are right about that Randy! It's a nightmare to navigate! Thanks for sharing this resource!
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