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Insight Into Commission Structures Needed
I'm in negotiations with my employer regarding my commission pay structure. Her attorney is advising her to deduct a portion of my payroll as a cost before paying my percentage earned through a sale. I've never heard of that done before. Has anybody else?
6 Comments
Robin Finnell
Wardrobe Stylist
107
12/22/20 at 10:31PM UTC
This doesn't make sense to me. As a cost for what?
Reply
Debra SesholtzMarketing strategist driving results
106
12/23/20 at 1:07AM UTC
Agree with Robin, this doesn’t make sense or sound right. Usually a salesperson gets paid a base salary+ commission. Do you have any documentation showing what you agreed to when you took the job?
1 Reply
Rosanna SavoneBusiness VP | Author | Ghostwriter in LA
14
12/24/20 at 4:24PM UTC
I do but it saids that third party vendor costs would be deducted and then the attorney is claiming payroll as one of those costs. I don't think payroll qualifies as a third party vendor.
1 Reply
Debra SesholtzMarketing strategist driving results
106
12/25/20 at 12:38AM UTC
Are you actually a employee of the company? I’ve never heard of this type of situation or what Gillianne describes. People can get creative with compensation packages. Too bad this wasn’t all vetted at your time of hire.
Reply
Gillianne HetrickHR Manager & Non-Profit Director
319
12/24/20 at 2:11AM UTC
This sounds like a draw situation (maybe?). Your base would be higher than normal with a portion of it being a "pre-payment" of earned commissions, then at the end of the month/ quarter/ year there would be a true up of your commission vs your draw and you would either owe back what was unearned or be paid the additional earned commission. We used this in a prior company to even out the first year of employment for commission positions where the sales would be "lumpy" due to a non-established territory.
Not uncommon, but should be clearly defined in an agreed upon commission plan.
1 Reply
Rosanna SavoneBusiness VP | Author | Ghostwriter in LA
14
12/24/20 at 4:23PM UTC
That's not what's happening here but that's good to know.
Reply
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