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Secretary of Labor Thomas E. Perez
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Wages

Commissions

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.

Laws & Regulations on This Topic

Regulations

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