draws on future commissions

As we enter the holiday season, we gather around the bubbler to sing about a few of our favorite (and not so favorite) things in the world of employment and labor law.  Unfortunately, they’re not as sanguine as raindrops on roses or whiskers on kittens…

Some retail employers will be on Santa’s naughty list after the Sixth Circuit found that sales employees paid on a 100% commission or draw basis cannot be required to repay outstanding draws after termination of employment.  The Senate decked the halls of the NLRB by confirming a new General Counsel, who will serve a critical policy role and is expected to move away from enforcement of the NLRB’s broadened joint-employer standard.   This could be the last Christmas employees have to visit EEOC offices in person to file discrimination charges after the EEOC launched a new online portal, putting employers on alert of the possibility of increased charge filings in 2018.  It’s a wonderful Christmas time for minimum wage workers in Montgomery County, Maryland, in DC’s metro area, who joined the small but growing ranks of jurisdictions increasing its minimum wage to $15.00 per hour beginning in 2021. Retail employees in New York might get a silent night away from work thanks to new employee scheduling regulations proposed by the New York State Labor Department that will limit “just in time” or “on call” scheduling and require additional pay for employees scheduled on short notice.  While California employers may have longer than 8 nights, they don’t have quite a month to prepare for new regulations that will take effect January 1, 2018, which expressly prohibit employers from inquiring about an applicant’s criminal history prior to a conditional offer of employment.

Employers beware.  A recent case serves as a reminder as we wind down the calendar year that employers should closely review their policies and procedures applying to employees paid on a 100% commission or draw basis.  In Stein v. HHGreg Stores, the United States Appeals Court for the Sixth Circuit ruled that, while a retail employer’s draw on future commissions to meet minimum wage requirements was lawful, the company policy requiring repayment for outstanding draws after an employee had been terminated was not.

Continue Reading Sixth Circuit Draws the Line: Draws on Future Commissions and Post-Termination Payback Policies