Commission Promises | When to Distrust Your Employers

Sirens prey on employees who are in line to receive exceptionally large commission income. If your company or manager is greedy, they may try to take your commission away from you if they can get away with it. This is likely to occur where:

  • There is an exceptionally large, record-breaking sale that was not anticipated by management;
  • Where management discriminates and feels uncomfortable with a female and/or minority or other “outsider” earning a large income;
  • Where management does not perceive significant future value of your efforts relative to their obligation to compensate you. This occurs where the company perceives you have successfully developed most of the new business in your territory and that you are being compensated under your plan primarily by future commissions from repeat business rather than from the initial commission derived from the first sale from the customer. This also happens where the salesperson has landed a particularly large single client whom the company believes will continue to buy a large volume product without requiring a continuous relationship with the particular salesperson involved;
  • Where the sales person has larger income than his or her manager;
  • Where the salesperson quits or is terminated;
  • Where the company is shaky financially.

If your employer is refusing to pay you a commission to which you believe you are entitled, you should consult an attorney. Various state statutes often provide special remedies for employees who are denied payment of wages and often commissions fall within the definition of wages. Moreover, you should have a remedy for a breach of contract.

Remember, if you get in a dispute over wages, this will probably not endear you to your employer. If you wish to dispute a commission payment with your employer it is probably wise to consider a future plan to pursue your career elsewhere.

Protecting Your Commission

  • Read carefully and save any written policies concerning commission payments. Pay particular attention to any provisions concerning the payment of commission after your termination;
  • Confirm in writing any verbal statement by management concerning the payment of commissions;
  • Don’t get too greedy. If the commission on a deal appears excessive, consider renegotiating the deal with your employer;
  • Employers often figure that once a solid client base is developed, the salesperson is now dispensable. Terminating the salesperson can be a means of saving expense to the company and meeting aggressive budget targets and/or as a means of converting additional commission income from the pocket of the salesperson to the pocket of the manager. A prelude to this is often one’s manager becoming excessively involved in personally dealing with your client. If your compensation depends on future commissions, be sure that you either can trust your employer or that you will continue to be perceived as indispensable;
  • Do not sign a non-compete agreement that will keep you held hostage to your current employe
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