Employment Recruiters Deemed Subject to Commissioned Employee Exemption

In yet another effort to tap into the wage and hour jackpot, in the case of Muldrow v. Surrex, the plaintiffs brought a claim for overtime and a failure to provide meal periods, among other claims, arguing that the senior consulting managers at the recruiter, Surrex, were not covered by the sales exemption, as they were not in “sales” positions. The court distinguished these recruiters from mechanics and drivers and ruled, “they are salespeople.” Fact was, the plaintiffs were involved principally in selling the product or service of recruiting.

A few points were made by the court:

1. An employer is not precluded from calculating commissions based on anything other than a straight percentage profit.
2. The employer may offset costs to determine profits as part of a commission scheme.
3. The commissions must be sufficiently related to the price of services sold to constitute commissions for purposes of the exemption.