commission sales people

We are going to hire a sales force to sell to retail establishments.
We want to pay them a base plus commission. Can we pay less than min. wage as their base to help promote them to earn more commission?
How do car sales people work their pay?


  • 2 Comments sorted by Votes Date Added
  • Check 29 cfr 541.500 -508. Auto sales are a 13(b)(10) exemption.
  • MISKLU: Based on my reading of the FLSA and "outside" Sales person is exempt from the standards set in the FLSA. Are these positions correctly classified with their work accomplishing the production of sales for the company? If you are comfortable with a correct EXEMPT classification, there is no test available for these employees such as a minimum wage + commission.

    It appears to me that your compensation could be all commission with a minimum wage draw guarntee of $206.00 gross per week. This minimum wage draw could be stair stepped down to no base as the sales level per week is creating sufficient income from commissions, such that, the employee's compensation package would no longer require a draw from the commissions the individual has earned. The sooner the employee can be weaned from the base the happier they become. There are benefit cost that must be taken, so the minimum base will allow for premium cost coverage.

    This being said, I would recommend you set the base at something above minimum wage to offset the benefit and taxes required and still leave the ee with an approximately $200.00 gross Net + commission per week. I have only had one opportunity to supervise the commission sales compensation package and there was an argument every week. Keep it simple, and avoid the pitfalls.


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