Gretchen is hired as a sales person, and her base salary will be minimum wage. However, she will earn a $200 commission for every sale she makes. Her new boss let her know that most salespeople at this firm average 8-10 sales a week except for the month of January when sales drop dramatically and do not pick up until mid-February or early March. Is this legal?

Question

Responses

No, working on commission is illegal in many states.

Yes, it pays minimum wage and commission income often varies.

No, employers need to make sure that employees have a steady income.

Yes, but this is a very usual arrangement for those who work on commission.

Answer 1

The correct response is:

Yes, but this is a very usual arrangement for those who work on commission.

In many states, it is legal for employees to work on a commission basis, even if their base pay is minimum wage, as long as they comply with labor laws regarding minimum wage and overtime. Commission structures are common in sales positions, and it is typical for earnings to fluctuate based on performance and sales cycles. However, it's important that her total earnings meet or exceed the minimum wage for all hours worked.