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Court Upholds hhgregg Sales Commission Scheme

In a ruling that could impact other retailers, an appeals court found that hhgregg’s “commission-with-draws” policy complied with federal law.

In a ruling that could impact other retailers, the Sixth Circuit Court of Appeals found that hhgregg’s compensation program complied with the Fair Labor Standards Act (FLSA). At issue: the shuttered chain’s “commission-with-draws” policy, a commonplace practice in which sales associates’ pay is drawn from future earnings during periods when their commissions amount to less than the minimum wage.

“In what may be viewed as a pyrrhic victory, now-defunct ‘big box’ electronics, appliance and furniture retailer hhgregg’s commission-with-draws compensation program generally was lawful under the FLSA, the Sixth Circuit Court of Appeals has held.”

See the full report in The National Law Review

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