The statutory minimum wage sales commissions issue is a frequent source of disputes. Many employees working on a commission basis wonder whether their monthly earnings actually meet the legal floor. A recent ruling by the Higher Labor Court (Landesarbeitsgericht) of Mecklenburg-Vorpommern dated July 8, 2026 (Ref. 5 SLa 44/26) provides clarity. It holds that commissions can generally be credited toward the minimum wage, provided they have been paid out to the employee on a final basis. This means: even if a fixed base salary is paid, that base alone does not have to cover the minimum wage — commissions can be included in the calculation.
Minimum Wage Entitlement: What Lies Behind It?
The statutory minimum wage is designed to ensure that every employee receives a certain minimum remuneration for their work. It applies to virtually all employees aged 18 and over, regardless of industry or experience. The employer is obliged to set the monthly gross remuneration so that it corresponds at least to the minimum wage multiplied by the hours actually worked.
What matters is the actual payout: the decisive factor is whether the employee can dispose of the corresponding amount at month-end. The entitlement to the statutory minimum wage is a mandatory right that cannot be waived by contract. Employers who fail to pay the minimum wage risk not only back-pay claims but also fines.
How Base Salary and Commission Interact: How Is Pay Structured?
In many sales roles — for example, in car dealerships — a pay structure combining a fixed base salary (base pay) and a performance-based commission is common. The base pay is meant to give the employee a degree of planning certainty, while the commission incentivizes successful sales. Typically, the commission is calculated as a percentage of revenue or gross profit.
In the decided case, the employee had agreed a base pay of €1,250 gross, plus a commission of 4.5 percent of the gross profit from used-car sales. The base pay was well below the minimum wage at the time, yet the total gross remuneration — thanks to commissions — ranged between €3,300 and nearly €10,000 per month. The court’s decisive question was not whether the base pay alone covered the minimum wage, but whether the total remuneration actually paid out reached the statutory floor.
Employees should understand: the minimum wage is not tied to the base pay. It is permissible for the base pay to be lower than the minimum wage, as long as commissions lift the total remuneration to the required level. This flexibility allows employers to retain variable pay models without violating the Minimum Wage Act.
Minimum Wage Sales Commissions: What Is Permitted?
According to the ruling of the Higher Labor Court of Mecklenburg-Vorpommern, paid sales commissions are regularly credited against the minimum wage entitlement. This means: the employer fulfills their obligation under § 1 MiLoG (Minimum Wage Act) if they pay the employee a total remuneration that reaches the minimum wage — even if part of it consists of commissions. The method of commission calculation is irrelevant, provided the amount paid out remains with the employee on a final basis.
This clarification is important for all employees whose remuneration fluctuates heavily. If commissions are particularly high in one month, they can cover the minimum wage for that month, even if the base pay alone would not have sufficed. Conversely, a low-commission month does not automatically mean the minimum wage has been undercut — what always matters is the total remuneration actually paid out.
The court did emphasize a limit, however: the employer can only rely on commissions that have finally flowed to the employee. If commissions are later clawed back — for instance, due to contract cancellations — they may not be retrospectively credited toward the minimum wage if the employee has already spent the money and cannot repay it.
The Pitfall of Cancellations: How They Affect Earnings
Things become especially tricky when commissions are recalculated because contracts are cancelled. In the case at hand, the employer had paid out a commission of over €4,000 in one month but also deducted €266 for a cancelled contract. The court saw no issue with this, as long as the amount paid out — after the deduction — still exceeded the minimum wage.
The key question is whether the payslip contains a reservation. In this case, the payslips contained no indication that commissions had to be repaid in the event of cancellations. As a result, the employer could no longer assert clawback claims later. Employees should therefore scrutinize their payslips: if a reservation is mentioned, such as “repayment in case of cancellation,” you should know that this amount does not count as finally paid out.
If an employer demands repayment of commissions that have already been paid out, without this being clearly agreed in the contract or stated on the payslip, this may violate the minimum wage — because the employee has already spent the money and the employer cannot simply withhold it. In such cases, you should seek legal advice.
What Employees with Variable Pay Need to Know Now
The ruling of the LAG Mecklenburg-Vorpommern gives employees with variable remuneration an important point of reference. The basic principle is: commissions can cover the minimum wage, but only if they are actually paid out and not subject to a repayment reservation. If your employer tries to cut or claw back commissions after the fact, you should check whether this is lawful.
Regularly review your payslips: is the total gross remuneration high enough to reach the minimum wage for your working hours? Are commissions calculated and shown correctly? Are there indications of possible clawbacks? If anything is unclear, do not hesitate to ask your employer for a written explanation.
If you are also affected by a dismissal — as in the decided case, where the branch was closed — you should observe the deadlines for an unfair dismissal claim. In the event of job cuts, special rights apply that you should be aware of. Your minimum wage sales commissions must also be calculated correctly during the notice period — right up to the last working day.
Support for Pay Questions: When a Specialist Lawyer for Labor Law Helps
If you suspect that your employer is not calculating the minimum wage correctly — for example, because commissions are being unlawfully withheld or clawed back — you should seek professional help. A specialist lawyer for labor law can review your payslips, assess the legal situation, and, if necessary, file a claim with the labor court.
The costs of such proceedings can, under certain circumstances, be covered by a litigation funder like RechtStark, which examines the prospects of success and assumes the financing. This means you do not have to advance costs to enforce your rights. A specialist lawyer can also clarify whether a dismissal is effective and what claims you are entitled to — for instance, a severance payment or wages for the period of delayed acceptance.
Do not hesitate to seek advice early, because many deadlines in labor law are short. The sooner you act, the better you can secure your claims. The LAG ruling shows: even complex remuneration models can satisfy the minimum wage, but only if the payments actually and finally arrive with you.
Note: This article is for general information purposes only and does not replace individual legal advice. For a free initial assessment of whether litigation funding may be an option for your case, you can contact RechtStark.