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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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Copyright 2022, slnlaw
  • Home
  • About
    • Reviews
    • Slnlaw Offices
    • Blog
    • 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
    • Andrew Silvia
    • Elijah Bresley
  • Employment Law Solutions
  • Estate Planning
  • Business Law Solutions
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • 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