Can a W2 employee be paid only Commissions?

[BulldogTom]

There is a company I know who has all 1099 outside sales staff.   In light of the new Biden Admin DOL ruling, they are looking to convert them all to W2 employees with full benefits, but only pay them straight commission on their sales.   Is this proper?   Seems to me there are wage and hour issues with this approach, but sometimes salesmen get special rules.   I looked a the rules for statutory employees and those rules do not seem to fit.

Anyone have experience with Commissioned Salesmen?

Thanks

Tom
Longview, TX

[DANRVAN]

4 hours ago, BulldogTom said:

but only pay them straight commission on their sales.   Is this proper?

yes

 

4 hours ago, BulldogTom said:

sometimes salesmen get special rules.

There are special rules, but not off the top of my head.

[BrewOne]

https://www.dol.gov/agencies/whd/fact-sheets

interesting stuff

[joanmcq]

I was a W2 commissioned salesperson.  I got minimum wage whenever my sales did not exceed minimum wage for the hours worked.

[BrewOne]

come to think of it, that's how I was paid at H&R Block (And why I wasn't keen on bailing out preparers who started returns they didn't know how to do).

[WITAXLADY]

speaking of which -

then the gross was netted against commission - whichever was higher - so I feel the month of January, I feel I got paid -0-

As the w-2 paycheck was an advance against the commission..

and earning no commission in Jan = zero paid for!

such a deal - work the first month for free - Should have started in Feb!!

Am I correct in my thinking?

 

D/WI

[Medlin Software, Dennis]

Unless there is some exception (real estate agents?), commission is fine, but still have to monitor and make up, if less than min wage for all time worked. Likely some federal rule to start, then possibly modified by state rules.

These days, with CA and ABC, and what DOL is doing/trying to do to somewhat align federal with CA, everyone should be considered an employee unless an exception can be mapped out case by case. 

Payroll is more complicated than ever, with many unqualified people handling payroll using the employer's choice of "magic" software (the kind which says or implies no knowledge is needed. (Sound familiar to tax preparer's world?)

In a group of payroll "pros", who pay to be part of the group, there are multiple posts, daily, asking essentially why they should withhold for the worked in state, even if the company is located in another state. Granted, many of the posters are new, but even needing to ask in a forum tells me how little the employer is aware that the software or online processor they use is "doing" for them. Today, one of the posts was about a payroll software which allowed allocation of wages by state, with another which somehow was allocating some by worked in state and lived in state. neither is correct, since one has to track time worked at each location, and where an employee lives/gets mail is not material.