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 Web site.
Employee of a "retail or service establishment"
Compensation requirements for overtime pay exemption under section 7(i)
Methods of compensation of retail store employees
Types of employment in which this overtime pay exemption may apply
Computing employee's compensation for the representative period
What compensation "represents commissions"
The "representative period" for testing employee's compensation
Grace period for computing portion of compensation representing commissions
Dependence of the section 7(i) overtime pay exemption upon the level of the employee's "regular rate" of pay
Basic rate for computing overtime compensation of nonexempt employees receiving commissions