Sales employees often receive their income either in full or in part through sales commissions. These are monetary amounts based off of a percentage of the amount that they bring in to the company through sales. A sales commission agreement is usually a necessary part of employment agreements for certain workers employed as sales agents or sales representatives.

Sales commission agreements may be incorporated into the sales worker’s employment contract. The agreement may cover terms such as:

  • The parties involved, plus contact information and other identification
  • The amount or percentage they receive upon closing each sale
  • Monthly or weekly quotas that the person needs to meet in terms of sales volume
  • How long the employment will last
  • Whether or not the person will also be paid hourly wages

How Are Sales Commissions Determined?

Sales commissions may be determined by various factors, including:

  • Industry standards
  • The person’s individual sales records from previous sales positions
  • The amount of sales volumes generated by the employee
  • Geographic-dependent factors, such as the cost of living

Again, the sales commission amounts are often negotiated prior to hiring and then finalized into the sales commission agreement. The amount and agreement can normally be modified as the employee gains more experience in the sales department.

What If I Have a Dispute over a Sales Commission Agreement?

Disputes over sales terms for employees may arise from sales commission agreements. A common dispute is where the employee is paid less than the percentage for commissions that is listed in their sales commission agreement. Remedies may vary depending on whether such discrepancies are accidental (i.e. due to a clerical error) or intentional.

In most cases, a monetary damages award may be sufficient to compensate the person for lost earnings. In other cases, the discrepancy may be solved through involvement with the human resources or accounting department. Other remedies may include a change in employee policies or company rules. Some sales commissions disputes may also involve issues with unpaid wages.

Do I Need a Lawyer for Assistance with Sales Commissions Agreements?

Sales commissions can often go into detail and may be very complex and technical. You may need to hire an employment lawyer in your area if you need assistance with any legal issues. Your attorney can be on hand to help with negotiations and can help review any agreements. Also, if you need to file a lawsuit, your attorney can assist you during the court procedures.