Commission Pay Laws in Louisiana: Your Rights as a Commission Worker

Under the Fair Labor Standards Act (FLSA), 29 U.S.C. § 206, all employees—including those paid on commission—must earn at least the federal minimum wage of $7.25 per hour when averaged across all hours worked in a pay period. The FLSA defines 'wages' broadly to include commissions, and employers cannot make deductions that reduce total compensation below minimum wage.

The Department of Labor (DOL) interprets the FLSA to prohibit certain deductions from commission pay, including deductions for: tools and equipment, uniforms, or cash register shortages—unless the deduction would not reduce the employee below minimum wage. Commissions are considered earned income and must be paid promptly, typically in the pay period in which they were earned or within a reasonable time thereafter.

Draw accounts (advances against future commissions) are permitted under federal law, but cannot create a debt obligation that reduces the employee's total average hourly earnings below minimum wage. If an employee leaves employment with an outstanding draw that exceeds commissions earned, the employer may pursue collection only to the extent permitted by state law—federal law does not restrict this, but state law often does.

The EEOC also enforces the Equal Pay Act (29 U.S.C. § 206(d)), which requires that commission structures not discriminate based on sex. Enforcement is through the DOL's Wage and Hour Division (WHD) or the EEOC depending on the claim.

Louisiana Labor Code § 23:631 establishes that all workers, including commission employees, must receive at least the federal minimum wage of $7.25 per hour when all compensation (salary, bonus, commission, and draw) is averaged across all hours worked in a pay period. Louisiana has not established a state minimum wage higher than the federal floor, so the federal $7.25 rate applies statewide.

Louisiana Revised Statute § 23:632 restricts wage deductions. Employers cannot deduct from commission pay for: returns, refunds, merchandise damaged by customers, cash register overages or shortages, tools, uniforms, or other business costs—unless the deduction is authorized in writing by the employee and does not reduce total earnings below minimum wage. Any deduction that would bring the employee below minimum wage when averaged across all hours is prohibited. This is stronger protection than some states, as it requires explicit written consent for permissible deductions.

Louisiana § 23:633 requires that all earned wages, including commissions, be paid by the final paycheck. Commissions must be paid within 15 days of the end of the pay period in which they were earned, or according to the pay schedule specified in the written commission agreement. If the agreement is silent on timing, commissions must be paid promptly—courts interpret this as no later than the next regular paycheck.

State law requires all commission agreements to be in writing and provided to the employee before work begins (or at hire). The agreement must specify: the commission rate or formula, what sales or metrics trigger commission, the payment schedule, conditions for forfeiting or adjusting commissions (e.g., customer nonpayment or returns), and any draw account terms. Oral agreements are not enforceable under Louisiana law.

Unlike some states, Louisiana does not impose specific limitations on draw accounts against future commissions, but they cannot create net wage debt that reduces the employee's average hourly rate below minimum wage. Employers cannot require employees to repay draws in excess of commissions earned during employment, except in limited cases of intentional misconduct or theft (and even then, deductions are limited).

Louisiana law provides limited exceptions to commission payment requirements. The primary exception is the draw account mechanism: employers may advance funds against future commissions, but only if the agreement is in writing and clearly states the draw amount, repayment terms, and how draws are credited against earned commissions.

Commissions may be forfeited or reduced if the employee fails to meet explicit conditions stated in the written agreement—for example, failure to close a sale, customer nonpayment, or merchandise return. However, the employer cannot unilaterally change commission terms mid-employment without the employee's written consent. Additionally, any forfeiture or reduction cannot result in total pay below minimum wage when averaged across all hours worked.

Employees who are independent contractors (not employees) fall outside commission protections entirely. Louisiana applies the 'ABC test' under the Dynamex decision for misclassification disputes: the worker must be free from control, perform work outside the employer's usual business, and be customarily engaged in an independently established business. This test is strictly applied, and many 'commission-only' workers initially classified as independent contractors have been reclassified as employees.

At-will employment allows employers to terminate commission employees without cause, but termination cannot be retaliatory or discriminatory. Unpaid commissions earned before termination are still owed and must be paid by the final paycheck. Commissions not yet 'earned' (e.g., pending customer payment or delivery) may not be owed upon termination, depending on the written agreement's terms on what constitutes 'earned' commission.

Louisiana has no specific carve-out for sales employees or high-earners. Even if an employee's total annual earnings are substantial, the minimum wage floor and deduction restrictions still apply each pay period. Union employees covered by collective bargaining agreements may have different commission structures negotiated in their CBA, which can override some state law protections—but federal minimum wage and final paycheck rules still apply.

Step 1: Document All Commission Activity. Keep records of every sale, transaction, or metric that triggers commission eligibility. Retain written commission agreements, email confirmations of rates, and internal policies on how commissions are calculated. Document the employer's calculation method and compare it to your understanding of the agreement. Take screenshots of commission statements or pay stubs that show commission amounts, draw deductions, and how averages are computed. Note dates when commissions were supposed to be paid versus when they were actually paid. Record any communications with your manager or HR about commission disputes, including emails, texts, or meeting notes.

Step 2: Attempt Internal Resolution. Contact your employer's HR or payroll department in writing (email is best for a documented trail) with a clear explanation of the commission dispute. State the specific amount owed, the period it covers, and how you calculated it based on the written agreement. Request a written explanation of how the employer calculated the commission. Allow 10-15 business days for a response. If the employer offers a partial payment or explanation you reject, respond in writing stating why you believe it is incorrect. Request a meeting with a supervisor or HR manager to discuss. Document any verbal responses in writing by sending a follow-up email summarizing what was discussed.

Step 3: File with the Louisiana Department of Labor (LDOL) Wage and Hour Division or the U.S. Department of Labor Wage and Hour Division. The LDOL Wage Claim Form can be filed online at www.ldi.la.gov or by mail to the Department of Labor, 1001 N. 23rd Street, Baton Rouge, LA 70802. Include: your name and contact information, employer name and address, specific dates of unpaid commissions, the amount owed, the written commission agreement or job offer letter, pay stubs showing calculations, and any written communications with the employer about the dispute. The deadline to file is typically three years from the date the commission was due (under La. Rev. Stat. § 23:633). Federal claims can also be filed with the U.S. Department of Labor Wage and Hour Division at www.dol.gov/wecanhelp or by calling 1-866-4-USDOL.

Step 4: Expect the Investigation Process. After filing, the LDOL or DOL will contact your employer and request payroll records, commission agreements, and the employer's calculation method. This process typically takes 30-90 days. You may be asked to provide additional evidence, such as sales records, customer confirmations, or communications showing what you believed you had earned. The agency will compare the employer's records against the written agreement and state/federal law. If the agency finds a violation, they will issue a citation and demand back pay. The employer has the right to contest the finding, which may lead to a hearing before an administrative judge. The investigation is free, and you are not required to have an attorney, though you may consult one.

Step 5: Consult an Employment Attorney if the LDOL or DOL process stalls, if the amount owed is substantial (over $5,000), or if the employer retaliates after you file. Contact the Louisiana State Bar Association's lawyer referral service or the National Employment Lawyers Association (NELA) to find a qualified employment law attorney. Many employment attorneys work on contingency (no upfront fee) for wage claims. An attorney can file a private lawsuit in civil court under La. Rev. Stat. § 23:633 for unpaid wages, which may include penalties, interest, and attorney's fees if you win. Louisiana law allows employees to recover unpaid commissions plus liquidated damages up to the amount owed, making attorney involvement worthwhile for larger disputes.