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 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