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Overtime Pay and ‘Mercantile Trade’ Employees

Yesterday the Connecticut Supreme Court issued a ruling that will have a direct impact on many Connecticut workers.

Overtime Pay & ‘Mercantile Trade’ Employees

The case was handled by Hayber, McKenna & Dinsmore’s own Attorney Anthony Pantuso. The issue addressed was the overtime pay of commissioned workers employed in the ‘Mercantile trade.’ Connecticut has specific rules pertaining to wages for workers in these industries. You can find the Department of Labor’s publication on the rules here. The ‘Mercantile trade’ refers to the sale of commodities. For example, the retail and restaurant industries are considered mercantile industries. The rule also includes those employed in “any operation supplemental or incidental” to the sale of commodities. This includes jobs like “delivery, maintenance… stock and clerical work.”

Some employers pay ‘mercantile trade’ workers what is known as “half-time overtime,” also known as the “fluctuating work week” method. When an employee works overtime, the employer will divide the weekly income by the number of hours the employee actually worked each week to figure out an hourly rate. The employer then pays half that hourly rate for every overtime hour that the employee worked. This method results in the employee being paid less than with traditional time-and-a-half overtime and receiving a lower hourly rate the more hours they work. You can read a little more about the method here.

The Connecticut Supreme Court case involved managers and assistant managers at GNC that were paid salary and commission, with the overtime being calculated by the half-time method. Being retail workers, they were considered to be employed in the mercantile trade. Hayber, McKenna & Dinsmore argued that based on Connecticut’s rules, it is illegal to pay these mercantile trade workers using half-time overtime. We won.

The Court ruled: “In sum, we conclude that although Connecticut’s wage laws do not preclude the use of the fluctuating method, the plain meaning of the text in the wage order does.” Read the full ruling here.

So, if you work in the mercantile trade and receive commissions, this is good news. You cannot be paid half-time overtime.