If commissions are earned during a workweek that includes overtime (i.e., work beyond eight hours in a day or 40 hours in a week), such commissions are subject to the premium pay requirements.

For example, if an employee who receives an hourly rate of $10 plus commissions, works 50 hours and earns $100 in commissions, then he/she should be paid as follows:

40 hours straight time rate of $10 per hour      $400
10 hours overtime rate of $15 per hour           $150
Commissions                                              $100
*Commission Overtime                                 $  10
Total For Week                                           $660

*The overtime rate for commissions is calculated by dividing the number of hours worked during the workweek into the amount of commissions earned during the same workweek to obtain the regular hourly rate of earned commissions. In this example, that is $2 per hour. The overtime rate for commissions would be 1.5 times the regular rate, or $3 per hour. As the employee worked 10 hours overtime, the amount of overtime based on commissions would be 10 hours at $1 per hour, which equals $10. (The $100 includes 10 hours at the regular rate; therefore, only the half-time amount is due).