Fifth Circuit Analyzes Employee/Independent Contractor Issue

The Fifth Circuit Court of Appeals recently concluded that sales leaders for an insurance company were employees, not independent contractors. Hopkins v. Cornerstone America, No. 07-10952, available at http://www.ca5.uscourts.gov/opinions/pub/07/07-10952-CV0.wpd.pdf (5th Cir. Oct. 13, 2008). Fourteen former sales leaders sued for unpaid overtime wages under the Fair Labor Standards Act (“FLSA”). Because the FLSA applies to […]

Commission-Based Compensation Plans

Many salespeople earn some (or all) of their compensation pursuant to commission-based compensation plans. Under such plans, payments often reflect a percentage of the salesperson’s overall sales. Commission-based schemes reward salespeople for achieving high sales and may increase a company’s profits. But problems often arise in connection with commission payments. First, commission plans typically undermine […]