Can I Pay Employees Based on Their Sales or Revenue?
Legal Considerations for Commission-Based Pay
One way to control cost and cashflow for a small business is paying employees based on the revenue they bring into the business. Most commonly, this involves commissions on sales. It is also used in professional practices to calculate pay based on paid invoices and fees. You are still paying the employee, but only as the money to support it actually comes in.
This is legal as long as you ensure that the employees are getting at least minimum wage and, if they are non exempt from overtime, additional compensation for hours worked over 40 in any given week. This is why some many employers use either a base salary or a draw against commissions to make sure that these minimum requirements are met even in slow weeks.
Learn more here about commission pay under Massachusetts law.
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