Does an employer that pays salary plus commission have to have a written policy to show how commission will be calculated?

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Does an employer that pays salary plus commission have to have a written policy to show how commission will be calculated?

I worked for an employer as a salaried plus commission salesperson that was paid commissions quarterly. There was only one quarter in which there was a written commission schedule and when commissions came in lower than the schedule, we were told that there was a miscommunication. Outside of that one quarter, there was never a written schedule for how commissions were being paid and it fluctuated from quarter to quarter.

Asked on January 28, 2011 under Employment Labor Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

No, there is no legal requirement that a commission schedule be written--either in terms of the rate (including any credits, chargebacks, deductions, etc.) or in terms of the gross amount of sales; similarly sales targets do not need to be in writing. Also, an employer may, looking forward, alter the schedule, rate, target, etc., but cannot do so retroactively, for work done or sales made. Therefore, in the absence of a written schedule or a communication to the contrary, each quarter's commissions should be calculated the way the prior quarter's were--though again, with notice, that can be changed for the future at any point. If you think you are being cheated, you could take legal action (e.g. a lawsuit) if necessary.


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