The term commission has various meanings, but a sales commission is a sum of money paid to an employee contingent upon an event, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as incentives to increase worker productivity. A commission may be paid in addition to a salary or instead of a salary. The Fair Labor Standards Act (FLSA) does not require the payment of commissions.
In the case of a breach of an express contract provision, the employee is entitled to receive compensation for damages caused by the employer’s failure to fulfill its obligations under the contract. An employee may also be entitled to receive damages in connection with a violation of his or her implied rights. Recovery of damages in the form of commissions earned but not paid, in connection with work performed prior to the separation, for example, are generally recoverable.
The following is an example of a company's policy on commissions earned but not paid:
