Offer Letter for a Commissioned Salesperson

by Practical Law Labor & Employment and Practical Law Employee Benefits & Executive Compensation

A Standard Document that private sector employers can use to create an offer letter for a non-unionized, commissioned salesperson. This offer letter is intended to be used with a separate, written commission plan or agreement and establishes key terms of at-will employment. This Standard Document addresses critical components such as the employee's job duties, start date, and classification as exempt or nonexempt under the Fair Labor Standards Act (FLSA). It provides guidance on defining the commission structure, including how and when commissions are earned, paid, and reconciled. This letter also discusses important considerations for commission plans, such as recoverable and non-recoverable draws, adjustments, and chargebacks, while navigating compliance with wage and hour laws and the tax implications of Section 409A. Additionally, this Standard Document includes provisions for contingent offers, arbitration agreements, and an employee's continuing obligations to former employers.