Some salespeople are exempt from minimum wage and overtime laws.
Question: If I work on commission, can I earn less than minimum wage?
I have taken a sales job recently as an outside marketing representative. My earnings are 100% commission. The amount I have been earning working full time for a whole month has been less than minimum wage per hour. Is this legal?
Answer: It depends. Most employees are entitled to earn at least the minimum hourly wage, whether they are paid hourly, on a salary basis, by piece, by commission, or in any other way. The current federal minimum wage is $7.25; if your state or local government has a higher minimum wage, you are entitled to the higher amount.
However, there are some exceptions.
Independent Contractors and the Minimum Wage
One exception is if you're an independent contractor rather than an employee. Contractors generally aren't protected by the minimum wage laws.
Outside Salespeople and the Minimum Wage
Under federal law, outside salespeople are also not entitled to the minimum wage. An outside salesperson is an employee who customarily and regularly works away from the employer's place of business, and whose primary duty is making or taking orders to sell goods, services, or the use of facilities.
If you fit within this definition, you may be exempt from the federal minimum wage and overtime laws. However, if a state or local law entitles you to the minimum wage, you might still be protected.
Calculating Work Hours for Minimum Wage Purposes
If you're paid on a commission-only basis, or with a combination of salary and commissions, you must calculate the amount of hours you've actually worked each pay period to determine if your earnings reach the minimum wage.
You can find out whether you're receiving the minimum wage by taking your total compensation (commission plus salary) over the pay period and dividing it by the number of hours worked.
If the resulting figure is below the legal minimum wage in your state or locality, you should alert your employer. If your employer still fails to top up your pay to the legal minimum wage, consider filing a wage claim.
Contact an Attorney
If your employer refuses to pay you the minimum wage, contact an experienced employment law attorney to discuss your legal options. Even if the dollar amounts in question are relatively small, an attorney might be interested in taking your case if you have coworkers who have also been denied the minimum wage.
You can find an attorney near you using Nolo's Lawyer Directory.
