Is Your Company’s Commission Plan in Writing?
// Dallas, Texas, United States // Attorney Keith Clouse // Keith Clouse
Most employers who have multiple employees working on a commission basis have comprehensive compensation plans that address commission-related pay issues. But, sometimes the circumstances that lead an employee to work on commission develop organically, and the parties operate with a rough scheme that is never fully committed to paper.
All too often, disputes arise under these circumstances, usually when the employee leaves the employer. An employer in this situation might believe it can escape liability because the commission agreement was never formalized. But, commission pay agreements are enforceable whether they are oral or in writing, and agreements can be established by showing the employer’s practice of paying commissions in a certain way.
The best way to ward off potential problems is to create a solid commission pay agreement that clearly sets out how commissions are earned, when and under what circumstances commissions are to be paid, and what happens to commissions for sales that are in progress when the employee leaves the company. Once the agreement is made, the employer should follow it precisely.
To learn more about commission pay agreements, contact an employment lawyer in your area. This article is presented by the employment law attorneys at Clouse Dunn LLP. For inquiries, send an email to debra@clousedunn.com or call (214) 239-2705.
Contact Keith Clouse
KEITH A. CLOUSE
Clouse Dunn LLP
214.220.2722 214.220.3833 ( fax) keith@clousedunn.com
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