What is a Commission Agreement?
The Agreement is helpful for both employer and employee as it outlines the details of the work relationship. Terms include a definition of the expected employment, and commission percentages and salary, if applicable. Employees benefit from formal terms if there are any misunderstanding with the employer. An employer in turn can protect their business with confidentiality and non-compete clauses in the Commission Agreement.
When to use a Commission Agreement:
- You're hiring a new employee who will be paid in whole or in part on commission and wish to set down everyone's rights and obligations.
- You're being hired and you want to make sure everyone's rights and obligations are documented if your employer hasn't provided a written Commission Agreement.
This Commission Agreement (this "Agreement") is made effective as of , by and between , (""), of , , , and , (""), of , , , .
A. is engaged in the business of . will primarily perform the job duties at the following location: , , .
B. desires to have the services of .
C. is willing to be employed by .
Therefore, the parties agree as follows:
. EMPLOYMENT. shall employ as a(n) . shall provide to the services described on the attached Exhibit A, which is made a part of this Agreement by this reference. the following services: duties as needed.
accepts and agrees to such employment, and agrees to be subject to the general supervision, advice and direction of and 's supervisory personnel. shall also perform (i) such other duties as are customarily performed by an employee in a similar position, and (ii) such other and unrelated services and duties as may be assigned to from time to time by .
. BEST EFFORTS OF EMPLOYEE. agrees to perform faithfully, industriously, and to the best of 's ability, experience, and talents, all of the duties that may be required by the express and implicit terms of this Agreement, to the reasonable satisfaction of . Such duties shall be provided at such place(s) as the needs, business, or opportunities of may require from time to time.
. COMPENSATION OF EMPLOYEE. As compensation for the services provided by under this Agreement, will pay an annual salary of payable per . This amount shall be paid in accordance with 's usual payroll procedures. monthly on the day of each month. of the following month. semi-monthly on the day and the day of the month. on of every other week. every two weeks, no later than days after the payroll period that ended on the preceding . weekly, no later than days after the payroll period that ended on the preceding . Upon termination of this Agreement, payments under this paragraph shall cease; provided, however, that shall be entitled to payments for periods or partial periods that occurred prior to the date of termination and for which has not yet been paid, and for any commission earned in accordance with 's customary procedures, if applicable. Accrued vacation will be paid in accordance with state law and 's customary procedures. This section of the Agreement is included only for accounting and payroll purposes and should not be construed as establishing a minimum or definite term of employment.
. COMMISSION PAYMENTS. In addition to the payments under the preceding paragraph, As an alternative to the payments under the preceding paragraph, may receive commission payments in lieu of regular compensation for any particular pay. will make commission payments to based on of . This commission will be paid monthly on the day of the following month. semi-monthly on the day and the day of the month, each payment corresponding to the semi-monthly period that ended approximately fifteen days prior to the payment date. weekly, no later than days after the payroll period that ended on the preceding . every two weeks, no later than days after the payroll period that ended on the preceding . Upon request by , will make advances against expected commissions in accordance with 's usual policies.
. EXPENSE REIMBURSEMENT. will reimburse for "out-of-pocket" expenses incurred by in accordance with 's policies in effect from time to time. the following "out-of-pocket" expenses in accordance with policies in effect from time to time:
. RECOMMENDATIONS FOR IMPROVING OPERATIONS. shall provide with any information, suggestions, and recommendations regarding 's business, of which has knowledge, that will be of benefit to .
. CONFIDENTIALITY. recognizes that has and will have information regarding the following:
and other vital information items (collectively, "Information") which are valuable, special and unique assets of . agrees that will not at any time or in any manner, either directly or indirectly, divulge, disclose, or communicate any Information to any third party without the prior written consent of . will protect the Information and treat it as strictly confidential. A violation by of this paragraph shall be a material violation of this Agreement and will justify legal and/or equitable relief.
Directly or indirectly engaging in any competitive business includes, but is not limited to: (i) engaging in a business as owner, partner, or agent, (ii) becoming an employee of any third party that is engaged in such business, (iii) becoming interested directly or indirectly in any such business, or (iv) soliciting any customer of for the benefit of a third party that is engaged in such business. agrees that this non-compete provision will not adversely affect 's livelihood.
. EMPLOYEE'S INABILITY TO CONTRACT FOR EMPLOYER. shall not have the right to enter into any contracts or commitments for or on behalf of without first obtaining the express written consent of .
. BENEFITS. shall be entitled to employment benefits, including the following, as provided by 's policies in effect from time to time:
. VACATION. shall be entitled to of paid vacation for each completed year of employment. Such vacation must be taken at a time mutually convenient to and , and must be approved by . Requests for vacation shall be submitted to 's immediate supervisor prior to of each year. days in advance of the requested beginning date.
The provisions of this Vacation section are subject to change in accordance with policies in effect from time to time.
. SICK LEAVE. After completion of of employment, shall be entitled to shall be entitled to day(s) hour(s) paid time, due to illness unpaid time, due to illness or for personal business, for each calendar year beginning January 1, . for each year of employment, with the year to be measured using 's starting date as the point of beginning. Unused sick leave benefits as of of each year Up to of any unused sick leave benefits as of of each year may be converted into cash compensation at a rate of per . Sick leave benefits may not be converted into cash compensation. 's rights to unused sick leave benefits shall be forfeited upon termination of employment. Sick leave may be accumulated from year to year up to a total of ; excess amounts shall be forfeited. Sick leave may not be accumulated from year to year; unused benefits shall be forfeited.
All requests for sick days off shall be made by in accordance with policies in effect from time to time.
The provisions of this Sick Leave section are subject to change in accordance with policies in effect from time to time.
. PERSONAL LEAVE. After completion of of employment, shall be entitled to shall be entitled to day(s) hour(s) week(s) months(s) paid time, for personal business unpaid time, for personal business or due to illness, for each calendar year beginning January 1, . for each year of employment, with the year to be measured using 's starting date as the point of beginning. Unused personal leave benefits as of of each year Up to of unused personal leave benefits as of of each year may be converted into cash compensation at a rate of per . Personal leave benefits may not be converted into cash compensation. 's rights to unused personal leave benefits shall be forfeited upon termination of employment. Personal leave may be accumulated from year to year up to a total of ; excess amounts shall be forfeited. Personal leave may not be accumulated from year to year; unused benefits shall be forfeited.
All requests for personal days off shall be made by in accordance with policies in effect from time to time.
The provisions of this Personal Leave section are subject to change in accordance with policies in effect from time to time.
. HOLIDAYS. shall be entitled to holidays with pay during each calendar year. All requests for holidays off shall be made by in accordance with policies in effect from time to time. shall be entitled to the following holidays with pay during each calendar year:
The provisions of this Holidays section are subject to change in accordance with policies in effect from time to time.
. INSURANCE BENEFITS. shall be entitled to insurance benefits, in accordance with 's applicable insurance contract(s) and policies, and applicable state law. These benefits shall include:
The provisions of this Insurance Benefits section are subject to change in accordance with policies in effect from time to time.
. BENEFITS. shall be entitled to the following benefits:
. TERM/TERMINATION. 's employment under this Agreement shall be for an unspecified term on an "at will" basis. , beginning on . This Agreement may be terminated by upon written notice, and by upon written notice. If shall so terminate this Agreement, shall be entitled to compensation for beyond the termination date of such termination, unless is in violation of this Agreement. If is in violation of this Agreement, may terminate employment without notice and with compensation to only to the date of such termination. The compensation paid under this Agreement shall be 's exclusive remedy.
. TERMINATION FOR DISABILITY. shall have the option to terminate this Agreement, if becomes permanently disabled and is no longer able to perform the essential functions of the position with reasonable accommodation. shall exercise this option by giving written notice to .
. COMPLIANCE WITH EMPLOYER'S RULES. agrees to comply with all of the rules and regulations of .
. RETURN OF PROPERTY. Upon termination of this Agreement, shall promptly deliver to all property which is 's property or related to 's business (including but not limited to keys, records, notes, data, memoranda, models, and equipment) that is in 's possession or under 's control.
. NOTICES. All notices required or permitted under this Agreement shall be in writing and shall be deemed delivered when delivered in person or on the third day after being deposited in the United States mail, postage paid, addressed as follows:
Such addresses may be changed from time to time by either party by providing written notice in the manner set forth above.
. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the parties and there are no other promises or conditions in any other agreement whether oral or written. This Agreement supersedes any prior written or oral agreements between the parties.
. AMENDMENT. This Agreement may be modified or amended, if the amendment is made in writing and is signed by both parties.
. SEVERABILITY. If any provision(s) of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provision(s) shall continue to be valid and enforceable. If a court finds that any provision(s) of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid or enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
. WAIVER OF CONTRACTUAL RIGHT. The failure of either party to enforce any provision(s) of this Agreement shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Agreement.
. APPLICABLE LAW. This Agreement shall be governed by the laws of the State of Commonwealth of .
. SIGNATORIES. This Agreement shall be signed by , on behalf of and by in an individual capacity. This Agreement is effective as of the date first above written.
AGREED TO AND ACCEPTED.
Final Checklist for Commission Agreement
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Next Steps: Make it Legal
|_____||Look over the Commission Agreement to ensure it matches your intentions. If youd like to make changes, you can download this document in Microsoft Word, or you can make edits using the Document Manager on Rocketlawyer.com.|
|_____ If you have any questions about whether this document meets your legal needs, consult an attorney before signing. We can connect you with one in your area through the Rocket Lawyer On Call® network.|
|_____||The Commission Agreement should be signed and dated by both parties. It becomes effective as of the date inserted at the beginning of the Agreement.|
|_____||It is advisable to sign two copies of the Agreement so that each party will have a copy with original signatures.|
Give a signed copy of the document to:
|*||This document should not be used if the Employee is covered by a collective bargaining agreement, if the Employee is considered to be a consultant, or if the Employee is considered to be an independent contractor.|
|*||This document should be reviewed periodically to evaluate whether circumstances have changed enough to warrant changes to the Commission Agreement.|
|*||It is not necessary that the signatures be witnessed or notarized.|
|*||Original copies should be kept in a fire-proof and secure location.|
Reasons to Update
|*||Change or correct a term in the Agreement.|
When to Consult an Attorney
|*||A lawyer should be consulted regarding any unique issues not addressed by this document.|
|*||The non-compete provision is intended to provide additional protection against the possibility that the knowledge gained by the Employee regarding the Employer will be used in the future to compete against the Employer. However, the courts in many states view non-compete provisions as "restraints of trade," and therefore are reluctant to enforce them. Some states have significant restrictions on the enforceability of non-compete provisions.||has significant restrictions on the enforceability of non-compete provisions. Therefore, it is advisable to consult a lawyer to determine to what extent a non-compete provision may be enforceable in your state.|
Members can always consult an attorney at no extra cost!
|*||If you have quick questions or wish to review this document with an attorney, you can do so for free. Rocket Lawyer's On Call® service makes it fast and easy to speak with a local attorney. Get started by visiting the Find a Lawyer tab on our site, or calling (866) 243-2183.|