Commission Pay Laws in South Carolina: Your Rights as a Commission Worker

The federal Fair Labor Standards Act (FLSA), enforced by the Department of Labor Wage and Hour Division, establishes that commissioned employees must receive at least the federal minimum wage ($7.25/hour) for all hours worked. Under 29 U.S.C. § 206, commission-only employees are entitled to minimum wage protections just as hourly employees are.

The FLSA does not prohibit commission structures themselves—employers may compensate employees entirely through commissions. However, the total compensation, when divided by all hours worked, must equal or exceed minimum wage. For example, if an employee works 40 hours and earns only $200 in commission, that violates minimum wage if the result ($5/hour) falls below $7.25/hour.

Employers covered by the FLSA include those with gross revenue of $500,000 or more annually or those engaged in interstate commerce. Commission employees are covered the same as salaried or hourly employees. The FLSA also prohibits unlawful wage deductions under 29 U.S.C. § 215(a)(2). Deductions for uniforms, tools, shortages, or breakage cannot reduce pay below minimum wage.

Under the FLSA, there is no specific requirement that commissions be paid on a particular schedule—federal law does not mandate frequency. However, state law may impose stricter requirements. The Department of Labor Wage and Hour Division enforces these rules and can investigate wage and hour complaints.

South Carolina's wage and hour law, codified in South Carolina Code § 41-10-10, establishes a state minimum wage of $11.00 per hour (effective 2024), which is higher than the federal minimum wage of $7.25/hour. This means South Carolina employers must pay commissioned employees whichever is higher: the state minimum or federal minimum. In practice, South Carolina's $11.00/hour requirement applies.

South Carolina Code § 41-10-30 requires that all wages, including commissions, be paid at regular intervals—at least twice monthly. This is stricter than federal law, which has no specific frequency requirement for commission payments. Employers must establish a regular pay schedule and adhere to it. If an employee is owed commission, it must be paid on the next regular pay date according to the employer's established schedule.

South Carolina does not have a specific statute governing commission agreements or structures. However, the state follows common law contract principles. If an employer and employee have a written or verbal commission agreement, that agreement may establish the terms under which commission is earned and paid. The key restriction is that total compensation cannot fall below the state minimum wage.

Under South Carolina law, unlawful deductions are prohibited. Employers cannot deduct amounts for shortages, damages, uniforms, or other business expenses if doing so reduces compensation below minimum wage. All deductions must be authorized by the employee or required by law (such as tax withholding).

South Carolina's Department of Labor, Licensing and Regulation enforces wage and hour laws. Employees who believe they have been underpaid or denied commissions may file a complaint with the state labor department. Additionally, employees may pursue claims under the FLSA through federal court or the Department of Labor Wage and Hour Division, as South Carolina has not opted out of federal protections. Remedies available include unpaid wages, liquidated damages equal to unpaid wages, and potentially attorneys' fees if a lawsuit is successful.

South Carolina law does not cover all workers under minimum wage requirements. Independent contractors are not employees and are not entitled to minimum wage or commission protections under state or federal law. The key test is economic reality: if a worker controls their own hours, sets their own rates, provides their own tools, and works for multiple employers, they may be classified as independent contractors. However, misclassification as a contractor when the person should be an employee is a common violation.

Agriculture workers and certain farm employees may have limited protections under South Carolina law, though federal FLSA protections may still apply. Commissioned salespeople and other commission-based roles are NOT exempt from minimum wage requirements simply because they are commissioned. Some employers mistakenly believe that commission employees do not qualify for minimum wage, but this is incorrect under both state and federal law.

Employers can structure compensation to include bonuses, spiffs, or variable commissions, as long as total compensation meets minimum wage when averaged across all hours worked. Written commission agreements are not required by South Carolina statute, but they are strongly recommended to avoid disputes. If no written agreement exists, disputes over what was promised may be resolved based on the employer's past practice or verbal statements.

The minimum wage requirement applies to nearly all private sector employees. Non-profit organizations and government entities generally follow the same rules. There are no broad exemptions for small businesses or startups based on company size in South Carolina, though federal coverage depends on the $500,000 revenue threshold.

Step 1: Document Everything. Keep detailed records of all work performed, hours worked, dates, and any communications about commissions promised. Save emails, text messages, contracts, job offer letters, and any written compensation plans. Create a personal spreadsheet listing when commissions were supposedly earned, the amount, and when they were paid (or not paid). If commissions were not paid as promised, note the promised amount and the actual amount received. Photograph or screenshot any materials showing the commission structure.

Step 2: Understand the Internal Complaint Process. Most larger South Carolina employers have internal HR departments or complaint procedures. Review your employee handbook or company policies to see if there is a formal process for disputing wages or commissions. Filing an internal complaint creates a documented record and gives the employer a chance to correct the issue before external action is taken. Send a written request to HR or payroll asking for a detailed accounting of commissions owed, earned, and paid. Keep copies of all correspondence. However, if the company is small or has no formal process, you may skip to Step 3.

Step 3: File with the Appropriate Agency. You have two main options: (A) South Carolina Department of Labor, Licensing and Regulation (SCDHWR), Wage and Hour Section, or (B) the U.S. Department of Labor Wage and Hour Division. For South Carolina, contact the state labor department at their website (www.scdhec.gov or contact the labor division directly) or by phone. Request a wage complaint form. You will need to provide: your name and contact information, your employer's name and address, dates of employment, job title, description of how commission was supposed to be calculated, amounts promised vs. paid, and the dates of unpaid commissions. The deadline to file is generally governed by the statute of limitations: up to 2 years for unpaid wages under federal law (3 years for willful violations). File promptly.

Step 4: Expect the Investigation Process. Once a complaint is filed with the state labor department, a wage and hour investigator will be assigned. The agency will contact your employer and request records including payroll, commission agreements, emails, and payment records. The investigation typically takes 30-90 days, though complex cases may take longer. You will likely be interviewed and asked for additional documentation. The investigator will determine if wages were properly paid and calculate any amounts owed. If a violation is found, the employer may be ordered to pay back wages. The agency may also assess penalties. You do not need to pay to file a complaint.

Step 5: Consult an Attorney if Necessary. If the amount owed is substantial, if the employer retaliates against you, or if the state investigation is not progressing, consider consulting an employment law attorney. Many South Carolina employment attorneys work on a contingency fee basis for wage and hour cases, meaning you pay only if you win. An attorney can file a lawsuit under the FLSA in federal court or pursue a state law claim for breach of contract. Attorneys' fees may be recoverable if you prevail in federal court. Contact the South Carolina Bar Association Lawyer Referral Service or search for local employment law firms specializing in wage disputes.