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What is Commission Pay?

Commission pay is any compensation you receive that is based on your individual contribution to revenue.

The most common use of commission pay is with sales representatives.  Their total compensation may be a combination of base salary and a percentage of the sales they make, or it may be commission only.

Other forms of incentive pay can also be considered commissions.  For example, if you provide services on a fee for service basis, and are paid (in whole or in part) based on the revenue that the employer receives or invoices for your services, that is a form of commission pay.

Other forms of incentive pay- discretionary bonuses, profit sharing, or compensation based on the performance of a team or a department- are not based on your individual compensation, and are therefore not considered commissions.

Paying employees with commissions is acceptable under the law, but there are many ways in which a particular commission policy can run afoul of the wage and hour laws.  For example, if the commissions plus base do not equal minimum wage, or account for overtime for non-exempt employees.  There are also frequently issues with the timing of payment of commissions under the Massachusetts Wage Act.



Learn more here about commission pay under the Massachusetts Wage Act.

Need Help With a Commission Payment Issue?

Call (781) 784-2322
OR
Schedule a Free Information Call
When should I be paid commissions?

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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Advice for Employers
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
      • Should I Accept a Severance?
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws >
      • Overtime Law >
        • Overtime Exemptions
        • Employee Travel Time
        • Federal or State Overtime Law
      • Massachusetts Wage Act >
        • Payment of Commissions
        • Wage Deductions
        • Late Payment of Wages
        • Paid Time Off
    • Independent Contractor Law >
      • Independent Contractor Test
      • Working As Independent Contractor
      • Hiring Independent Contractors in Massachusetts
      • Is My Independent Contractor Status Legal?
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
      • Can I Avoid My Non Compete?
    • Do I Have a Case?
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog