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Birmingham Legal Blog

The importance of a contract for commission-based employees

The Fair Labor Standards Act ensures that employers follow minimum wage and overtime standards. However, the act does not have requirements for commission payments.

Because of this, issues over commissioned based wages are generally a little more complicated. As a sales professional, it is important that your employment contract has clear terms regarding your commission. These are a few of the important aspects that a contract should define.

Government is tracking exempt employment status

Worker misclassification is not a new problem in the business world, but recently, the repercussions of misclassifying workers with state entities have seen some changes. A worker is considered misclassified if they have been labeled an independent contractor. when in reality they should be considered employee.

Why would a business misclassify their workers?

When you work with the intangible, do the laws still apply?

When you’re looking for work, some things are of extreme importance. Depending on your circumstances, you might wonder whether you can work remotely or have a flexible schedule. Questions about what the benefits package looks like, if the position will provide you a work-life balance and how much paid time off you’ll get are typical.

However, if you work for commission, your questions might be pretty different than if you consider accepting a salaried position. There’s a big difference between working on straight commission and having a base salary on which you can rely. But when you’ve earned your commission and your employer refuses to honor it, can you protect your interests?


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