Commissioned Employees – Draft An Agreement Now, Avoid A Hassle Later

There is no shortage of claims brought by commissioned employees alleging the employer either did not pay, or underpaid a commission due the employee. More often than not, neither the employer nor the employee can figure out what (if anything) is in fact owed to the employee. These problems stem from a lack of clarity in defining the commission terms on the front end. A small expenditure of time and thought up front, including following the suggestions we make below, will help avoid complicated claims later.

Some states have tried to remedy the problem of commissions disputes by statute. For example, in California, Labor Code section 2751 requires:

• The employer provides commissioned employees commission agreements in writing