A sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as incentives to increase worker productivity. A commission may be paid in addition to a salary or instead of a salary. The Fair Labor Standards Act (FLSA) does not require the payment of commissions.
A fact sheet regarding commissions is available from the Wage and Hour Division's website.
Regulations on this Topic
- 29 CFR 779.410 - Statutory provision
- 29 CFR 779.411 - Employee of a "retail or service establishment"
- 29 CFR 779.412 - Compensation requirements for overtime pay exemption under section 7(i)
- 29 CFR 779.413 - Methods of compensation of retail store employees
- 29 CFR 779.414 - Types of employment in which this overtime pay exemption may apply
- 29 CFR 779.415 - Computing employee's compensation for the representative period
- 29 CFR 779.416 - What compensation "represents commissions"
- 29 CFR 779.417 - The "representative period" for testing employee's compensation
- 29 CFR 779.418 - Grace period for computing portion of compensation representing commissions
- 29 CFR 779.419 - Dependence of the section 7(i) overtime pay exemption upon the level of the employee's "regular rate" of pay
- 29 CFR 779.420 - Recordkeeping requirements
- 29 CFR 779.421 - Basic rate for computing overtime compensation of nonexempt employees receiving commissions
