Some jobs come with commission payments. Employees may see these as very valuable because they give them an incentive to earn commissions and increase their own yearly income.
Unfortunately, this can also lead to conflicts over unpaid commissions. To understand this process, let’s take a look at three different types of potential commission payment structures.
1. Straight commission
A job that pays straight commission means that the employee isn’t being paid an hourly wage or a salary. The only money they make is a percentage of their own sales.
2. Salary and commission
In some cases, workers do have a base salary or a base wage. But they can earn extra money on top of this by making commissions. A worker may earn $20 an hour, even if they have no sales at all, for example, but then they can earn an additional $100 in commissions for every sale they make.
3. Salaries with a bonus
A similar structure is where an employee has a set salary, but they can also earn bonuses. These aren’t direct commissions, but predetermined bonuses based on meeting certain benchmarks. For example, maybe there are 10 salespeople at a business. Every month, the salesperson with the most sales also earns a $10,000 bonus. They’re not making a set commission for each one of those sales, but they still have an incentive to make more sales in competition with other employees.
In all of these situations, employees may run into issues when bonuses or commissions are not paid properly. At that time, it’s important for them to know what legal options they have to claim the money that they are due.