The Framers of the Constitution included the Compensation Clause (also known as the Ascertainment Clause) in an attempt to structure the incentives facing Senators or Representatives in desirable ways. Two questions were critical: Would federal legislators be paid at all? If so, would they be paid by their respective states, or by the federal government?

First, as to whether federal legislators would be paid, the Constitutional Convention feared that unpaid legislators would turn to corruption to supplement their incomes. As Justice Joseph Story put it in his Commentaries on the Constitution of the United States, "they might be compelled by their necessities, or tempted by their wants, to yield up their independence, and perhaps their integrity, to the allurements of the corrupt, or the opulent." Thus, supporters of the federal legislative salary argued that providing no salary would not attract candidates motivated only by a sense of duty, but would instead permit only wealthy candidates, creating a de facto legislative plutocracy.

The second question involved the source of the payment. Under the Articles of Confederation, the states, rather than Congress, had paid the salaries of delegates to Congress. Most of the delegates to the Convention, by contrast, hoped that requiring federal legislators to be paid according to federal law, and out of federal funds rather than state funds, would make them less beholden to state governments. As Edmund Randolph put it, "[I]f the States were to pay the members of the National Legislature, a dependence would be created that would vitiate the whole system."

Modern controversies over the Compensation Clause have focused on different questions. Who should be able to change the level of legislative compensation, and how may the changes be made? The leading case is the 1988 decision of the Court of Appeals for the District of Columbia Circuit in Humphrey v. Baker. Under the mechanism for legislative compensation then in place, established by the Federal Salary Act of 1967, a "Quadrennial Commission" would make recommendations for salary increases to the President, who in turn had statutory authority to recommend increases to the Congress. The presidential recommendations become effective as law unless Congress enacted a joint resolution of disapproval within thirty days. After this procedure brought about a legislative pay raise effective in 1987, Senator Gordon Humphrey and five Members of the House sued the Secretary of the Treasury, claiming that the Salary Act violated both the Compensation Clause and the nondelegation doctrine. Relying heavily on precedent, the Court of Appeals rejected both claims. It read the Salary Act as fully complying with the clause; because the procedure that produced the pay increase (namely the delegation to the President followed by the disapproval option) was itself "ascertained" by statute, the clause was satisfied. Humphrey's capacious reading of the clause suggests that Congress has broad flexibility in designing schemes of legislative compensation, subject to the restrictions of the Twenty-seventh Amendment, which now prevents a sitting Congress from giving itself a pay raise to take effect during its term. In Schonberg v. Federal Election Commission (2011), the U.S. District Court for the District of Columbia held that the Compensation Clause only indicates the procedure by which compensation is determined, and it does not limit what Congress may define as compensation.