Sales Commissions

Full Video Transcript

If you’re in sales, then you should know when you are legally entitled to a sales commission – it can make a big difference to your bottom line! State law and employment contracts are important in determining whether you are entitled to a sales commission. Your employment contract should have a description of how and when you will be paid a sales commission. If it does not, then the courts generally consider the parties’ understanding of when an employee is entitled to a commission. A big issue with sales commissions is what happens if a salesperson leaves the company before the commission is paid. Some states have laws that require an employer to pay a commission to an employee who completed all necessary parts of the sale but then left the company before receiving the commission. This may happen if a customer delays payment or if the company only pays commissions a few times a year, for example. Sales commissions can be a big part of your income – so it is important to understand your rights to payment!