I am considering starting a Draw against Commission program with my new sales staff. If we evaluate sales monthly and the sales person does not meet their draw amount, what happens the following month? Are they in the negative? Or do we start from scratch again?
michr
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in the US regardless of how you pay salary, hourly, commission or piece rate a non-exempt employee must make at LEAST minimum wage for every hour worked.... you can use a draw against commission but if the employee has no commissions earned you still must pay them....
and for the purpose of draws each week overtime must also be accounted for
most states mandate that non-exempt employees must be paid at least bi-monthly .....
AND
if you allow a draw that exceeds the minimum wage and overtime for a given week and there are NOT enough commissions earned you can only carry over the amount of the draw that exceeds the minimum wage and overtime from that week into the next......
it is unlikely but it is possible that this is a moot point;
depending on the type of sales there is the possibility of the position being exempt (possibility, NOT likely) but you need to verify the exempt status through your states department of labor........
if it is exempt then the overtime and minimum wage issues are irrelevant.....
Pete
Yes, they would be in the negative. Basically, they owe YOU money. You should deduct that amount from their commissions in the next month.