(a) Retail or service establishment employees are generally
compensated (apart from any extra payments for overtime or other
additional payments) by one of the following methods:
(1) Straight salary or hourly rate: Under this method of
compensation the employee receives a stipulated sum paid weekly,
biweekly, semimonthly, or monthly or a fixed amount for each hour of
work.
(2) Salary plus commission: Under this method of compensation the
employee receives a commission on all sales in addition to a base salary
(see paragraph (a)(1) of this section).
(3) Quota bonus: This method of compensation is similar to paragraph
(a)(2) of this section except that the commission payment is paid on
sales over and above a predetermined sales quota.
(4) Straight commission without advances: Under this method of
compensation the employee is paid a flat percentage on each dollar of
sales he makes.
(5) Straight commission with ``advances,'' ``guarantees,'' or
``draws.'' This method of compensation is similar to paragraph (a)(4) of
this section except that the employee is paid a fixed weekly, biweekly,
semimonthly, or monthly ``advance,'' ``guarantee,'' or ``draw.'' At
periodic intervals a settlement is made at which time the payments
already made are supplemented by any additional amount by which his
commission earnings exceed the amounts previously paid.
(b) The above listing in paragraph (a) of this section which
reflects the typical methods of compensation is not, of
course, exhaustive of the pay practices which may exist in retail or
service establishments. Although typically in retail or service
establishments commission payments are keyed to sales, the requirement
of the exemption is that more than half the employee's compensation
represent commissions ``on goods or services,'' which would include all
types of commissions customarily based on the goods or services which
the establishment sells, and not exclusively those measured by ``sales''
of these goods or services.
