Best Compensation Model for P&C CSR?

[sgriswold]

My P&C business is growing much faster than I anticipated. My agent is already getting overwhelmed with non-sales tasks (quoting, servicing, etc.) and I think it's time to get a CSR.

What's the average pay for this type of job (in CA) and what's the best compensation model?

I'd like to do hourly + commission but according to my attorney this is a bad idea because it screws up calculation for overtime.
Also apparently in CA I can't do salary + commission unless the salary is above the exempt limit (well I *can* but again I'm told that if they work ANY overtime it'll be bad news).

 

[djs]

Yep, CSR's should be paid hourly, not salary. Weird rules, but due to a LOT of abuses, they do make some sense.

Why does hourly + commission screw up overtime? Overtime would be based only on the hourly rate. Commission is based on sales. Or did you mean salary + commission? That I can understand.

Dan

P.S. The answer to your question is it varies a lot, but they should more than earn their keep. I usually like to see $10-$12 an hour base rate, with bonuses that can get them up to $15-$18 an hour. Bonuses should be based on both personal and agency goals.

 

[VolAgent]

Yep, CSR's should be paid hourly, not salary. Weird rules, but due to a LOT of abuses, they do make some sense.

Why does hourly + commission screw up overtime? Overtime would be based only on the hourly rate. Commission is based on sales. Or did you mean salary + commission? That I can understand.

Dan

P.S. The answer to your question is it varies a lot, but they should more than earn their keep. I usually like to see $10-$12 an hour base rate, with bonuses that can get them up to $15-$18 an hour. Bonuses should be based on both personal and agency goals.

Overtime is to be based upon total compensation, not just hourly. A little known rule that can bite you in the rear.

 

[djs]

Please note, I said 'bonus', which is discretionary, which is NOT used in overtime pay.

I would also argue (perhaps incorrectly), that if commission is paid on top of a hour rate, the commission doesn't have to be extended to overtime. When its commission only, it clearly does, if the job is in house, not on the road. Ohh, this can get complex.....

Real answer: If you work for me, you don't get overtime. Clock out, go home.

 

[VolAgent]

Real answer: If you work for me, you don't get overtime. Clock out, go home.

Always the best answer. But as I understand it, you have to include commission in compensation for the week. Restaurants with tipped employees are the ones they usually target from what I understand.

 

[djs]

Yeah, but, commissions are not weekly and frequently are unknown for a month (based on getting calculations from the carrier).

Everything I've ever seen on this either uses the waiter who doesn't get paid minimum wage, assuming tips, or someone who is paid commission only. The law says 'regular rate of pay', it's a bit muddy when a minor portion of pay is commissions. There are several examples of companies paying less than 1.5x by using commission as part of the weekly pay, and getting by doing this. Not sure how that works... (actually, I understood how it was claimed they did it, just not sure I believed all of these stories).

Dan

 

[VolAgent]

Yeah, but, commissions are not weekly and frequently are unknown for a month (based on getting calculations from the carrier).

Everything I've ever seen on this either uses the waiter who doesn't get paid minimum wage, assuming tips, or someone who is paid commission only. The law says 'regular rate of pay', it's a bit muddy when a minor portion of pay is commissions. There are several examples of companies paying less than 1.5x by using commission as part of the weekly pay, and getting by doing this. Not sure how that works... (actually, I understood how it was claimed they did it, just not sure I believed all of these stories).

Dan

Excluding those with strictly hourly pay always at the same rate, I would say that most companies pay overtime incorrectly.

 

[sgriswold]

Please note, I said 'bonus', which is discretionary, which is NOT used in overtime pay.

Aha, little known fact: Bonuses ARE calculated in overtime pay in CA.:
California Court of Appeal Clarifies how to Calculate Overtime on a Bonus : Wage & Hour Counsel

However, your approach is probably the right one. No overtime - you worked 8 hours, now get the hell out of the office.

Thanks for the help, guys.