Dorsey Tire Co. failed to include commissions when calculating overtime rates
ATLANTA – Employers must accurately count all the hours employees work and include certain commissions earned when calculating overtime pay due. Failing to do so can lead to violations and result in unexpected costs in the form of back wages and, in some cases, penalties.
The U.S. Department of Labor’s Wage and Hour Division conducted three investigations of Dorsey Tire Co., a Pooler-based tire and automotive repair shop with locations in Summerville and North Charleston, South Carolina, and Pooler, Darien and Dublin, Georgia. Investigators found that Dorsey Tire failed to calculate overtime hours properly by not including time spent on after-hours service calls. Additionally, the employer did not include certain commission payments when calculating overtime pay due to tire technicians and sales employees. By failing to factor those commissions into their overtime rate, the employer paid workers lower overtime rates than required by law.
As a result of these findings, the division cited the employer for violations of the Fair Labor Standards Act’s overtime and recordkeeping requirements, and recovered $79,505 in back wages for 72 workers in both states.
“Employers must calculate and pay proper overtime rates, which can include earned bonuses or commissions, for each hour worked in excess of 40 hours in a work week. Not including all hours of work and commissions earned in overtime calculations denies workers the wages they have legally earned,” said Wage and Hour Division Regional Administrator Juan Coria in Atlanta. “Other employers should use the outcome of these investigations as an opportunity to review the requirements of the FLSA and ensure their pay practices comply with the law.”
The division conducted the investigations as part of the Southeast Region’s auto care initiative. In August 2021, three other South Carolina auto centers paid more than $78,000 to 34 workers as a result overtime violations found by agency investigators.
A compliance assistance toolkit is available for the Auto Repair and Maintenance industry. For more information about the FLSA and other laws enforced by the division, contact the agency’s toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, and use its search tool if you think you may be owed back wages collected by the division.