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Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 19023
Experience:  Employment/Labor Law Litigation
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How is a salesperson who earns a commission to be paid?

Customer Question

How is a salesperson who earns a commission to be paid for vacation?
Submitted: 1 year ago.
Category: Employment Law
Expert:  Allen M., Esq. replied 1 year ago.

This is actually not covered in either state or federal law. This is because vacation is not required for any employee and paid vacation is not legally required for a full commissioned employee.

The employer can choose from any number of options to pay for a commissioned employee vacation period.

  1. Use the minimum wage as the rate of pay for vacation/paid leave (also counts as a draw).

  2. Limit the total pay for vacation/paid leave to the amount of the salespersons’ usual draw.

  3. Use the total wages earned (base, commissions and bonus) over the previous quarter or other representative period and divide by the number of weeks in the quarter.

Any of those would be perfectly legal. What matters though is what the employer has defined as their basis for paying vacation time for a commissioned employee AND whether or not the employer is consistent in that policy among all commissioned employees.