employees

Written Commission Policies | The Power of Documents

Salespersons with written commission schedules have documents that limit their employer’s ability to dispute the applicable commission rate. If you are a salesperson and your commission agreement is vague, unclear or verbal, try to get a firm written commitment. If necessary, confirm the agreement yourself with a written memorandum to your supervisor. Do this BEFORE your sale.

Consider issues such as:

  1. Extra large, extra high profit, or extra low profit sales;
  2. When your commission will become due in relationship to the timing of the sale and subsequent vendor payment;
  3. Effect of your termination on your ability to collect a commission and whether the type of termination makes a difference;
  4. Sales where contribution of more than one salesperson is involved;
  5. If orders are of a continuing nature from an initial sale and your commission requires your continuing employment at the time of payment, consider whether your employer will have a motive to terminate you in order to prevent the commission payment obligation.
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