Insight Into Commission Structures Needed

Question

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?

Gillianne Hetrick · Answer

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.

Debra Sesholtz · Answer

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?

Robin Finnell · Answer

This doesn't make sense to me. As a cost for what?

You're invited.

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