Commission / Sales Compensation Agreement - District of Columbia

COMMISSION / SALES COMPENSATION AGREEMENT

TABLE OF CONTENTS

1. Parties and Effective Date
2. Position and Territory
3. Commission Structure
4. Base Salary and Commission Split
5. Definition of Compensable Sale
6. Payment Timing
7. Draw Against Commission
8. Clawback and Chargeback Provisions
9. Post-Termination Commission Rights
10. Expense Reimbursement
11. Quota and Minimum Performance
12. Territory and Account Protection
13. Non-Compete Reference
14. Dispute Resolution
15. Termination Provisions
16. DC-Specific Legal Notes
17. General Provisions
18. Signatures

1. PARTIES AND EFFECTIVE DATE

Employer / Principal: [________________________________] ("Company")
Address: [________________________________]
Jurisdiction: District of Columbia

Employee / Sales Representative: [________________________________] ("Employee")
Address: [________________________________]

Effective Date: [__/__/____]

This Commission / Sales Compensation Agreement ("Agreement") is entered into by and between the Company and Employee as of the Effective Date set forth above.

2. POSITION AND TERRITORY

Job Title: [________________________________]

Reporting To: [________________________________]

Assigned Territory / Region: [________________________________]

Assigned Accounts / Verticals: [________________________________]

Employment Status:

• ☐ Full-Time Employee
• ☐ Part-Time Employee

3. COMMISSION STRUCTURE

The Employee shall be compensated under the following commission structure:

Option A — Percentage-Based Commission

Option B — Tiered Commission

Option C — Flat Fee Per Sale

Selected Structure: ☐ Option A ☐ Option B ☐ Option C

4. BASE SALARY AND COMMISSION SPLIT

Base Salary: $[________________________________] per [☐ year / ☐ month / ☐ pay period]

Compensation Model:

• ☐ Commission Only (no base salary)
• ☐ Base Salary + Commission
• ☐ Base Salary + Commission + Bonus

Target Total Compensation (estimated): $[________________________________] per year

Pay Period for Base Salary: ☐ Weekly ☐ Bi-Weekly ☐ Semi-Monthly ☐ Monthly

5. DEFINITION OF COMPENSABLE SALE

A "Sale" or "Closed Deal" for purposes of commission calculation is defined as:

[________________________________]

A commission is deemed earned when:

• ☐ The customer executes a binding purchase order or contract
• ☐ The customer makes full payment
• ☐ The product or service is delivered and accepted
• ☐ Other: [________________________________]

Excluded from commission calculation:

• ☐ Returns, cancellations, or chargebacks within [____] days
• ☐ Internal or employee sales
• ☐ Sales below $[________________________________]
• ☐ Other: [________________________________]

6. PAYMENT TIMING

Commission Payment Schedule:

• ☐ Monthly, on or before the [____] day of the following month
• ☐ Semi-monthly, in accordance with regular payroll
• ☐ Other: [________________________________]

Commission Statements: The Company shall provide the Employee with an itemized wage statement on each commission payment date showing the amount of commissions separately, as required by DC law.

7. DRAW AGAINST COMMISSION

Draw Applicable: ☐ Yes ☐ No

If Yes:

Draw Amount: $[________________________________] per [________________________________]

Draw Type:

• ☐ Recoverable Draw (advance against future commissions)
• ☐ Non-Recoverable Draw (guaranteed minimum)

Repayment Terms (Recoverable Draw):
[________________________________]

8. CLAWBACK AND CHARGEBACK PROVISIONS

Clawback Applicable: ☐ Yes ☐ No

Clawback Period: [____] days from date of commission payment

Triggering Events:

• ☐ Customer cancellation within [____] days of sale
• ☐ Customer non-payment or default
• ☐ Return of product within [____] days
• ☐ Other: [________________________________]

Chargeback Calculation Method:
[________________________________]

9. POST-TERMINATION COMMISSION RIGHTS

Commissions Earned Before Termination:
All commissions that constitute earned wages as of separation shall be paid under D.C. Code § 32-1303: generally by the working day following discharge, or for an employee without a written contract exceeding 30 days who quits or resigns, by the earlier of the next regular payday or seven days after separation. A collective agreement with a bona fide union may specify otherwise, and an employee responsible for employer monies is subject to the statute's four-day accounting rule.

Commissions on Pending Sales:

• ☐ Employee is entitled to commissions on deals substantially procured by Employee but closed within [____] days after termination
• ☐ Employee forfeits commissions on deals not closed before the termination date
• ☐ Pro-rated commission on deals in progress at termination
• ☐ Other: [________________________________]

10. EXPENSE REIMBURSEMENT

The Company shall reimburse Employee for the following pre-approved business expenses:

• ☐ Mileage at the IRS standard rate
• ☐ Client entertainment (pre-approved)
• ☐ Travel expenses
• ☐ Cell phone / internet
• ☐ Other: [________________________________]

Reimbursement Procedure: Expenses must be submitted within [____] days with receipts via [________________________________].

11. QUOTA AND MINIMUM PERFORMANCE

Sales Quota: $[________________________________] per [☐ month / ☐ quarter / ☐ year]

Quota Review Period: [________________________________]

Consequences of Failing to Meet Quota:

• ☐ Performance improvement plan
• ☐ Reduction in territory
• ☐ Adjustment to commission rate (prospective only)
• ☐ Termination of employment
• ☐ Other: [________________________________]

12. TERRITORY AND ACCOUNT PROTECTION

Exclusive Territory: ☐ Yes ☐ No

If Yes, the Company shall not assign another salesperson to Employee's designated territory during the term of this Agreement, except:
[________________________________]

Account Ownership Rules:
[________________________________]

Split Commission Policy (if applicable):
[________________________________]

13. NON-COMPETE REFERENCE

☐ A separate Non-Compete / Non-Solicitation Agreement is attached or incorporated by reference (permitted only for highly compensated employees).

☐ A separate Confidentiality and Proprietary Information Agreement is attached or incorporated by reference.

14. DISPUTE RESOLUTION

Governing Law: This Agreement shall be governed by the laws of the District of Columbia.

Venue: Superior Court of the District of Columbia or U.S. District Court for the District of Columbia

Dispute Resolution Method:

• ☐ Litigation in DC Superior Court or federal court
• ☐ Binding Arbitration under [________________________________] rules
• ☐ Mediation followed by Arbitration

15. TERMINATION PROVISIONS

Employment Relationship: Employment is at-will unless otherwise stated in a separate written agreement.

Notice of Termination:

• ☐ At-will; no notice required by either party
• ☐ [____] days' written notice required by either party

Upon Termination:

1. All earned commissions shall be paid per Section 9
2. Company property must be returned within [____] days
3. Outstanding draw balances handled per Section 7

Modification of Commission Plan:
The Company reserves the right to modify this commission plan with [____] days' written notice. Changes apply prospectively only and do not affect commissions already earned.

16. DC-SPECIFIC LEGAL NOTES

Commissions as Wages: Under the DCWPCL, wages include all monetary compensation owed whether determined on a time, task, piece, commission, or other basis. Commissions receive full statutory protection.

Twice-Monthly Payment: D.C. Code § 32-1302 requires wages to be paid at least twice per calendar month on regular, designated paydays.

Itemized Statements Required: For commission employees, employers must provide itemized statements showing commission amounts separately and maintain a copy of the commission agreement.

Payment Upon Separation: D.C. Code § 32-1303 generally requires wages by the working day following discharge, or for a covered quit or resignation, by the earlier of the next regular payday or seven days after separation. Apply the collective-agreement, written-contract, employer-monies, and labor-dispute rules where relevant.

Wage Remedies: D.C. Code § 32-1308 provides relief including back wages unlawfully withheld, liquidated damages equal to treble the unpaid wages, statutory penalties, and, for a prevailing aggrieved person, reasonable attorney's fees and costs. Apply the claim-specific defenses, reduction rules, and prohibition on duplicate recovery.

Non-Compete Ban: D.C. law prohibits non-compete provisions for covered employees and permits qualifying agreements for highly compensated employees. The 2026 threshold is $162,164 generally and $270,274 for medical specialists, subject to annual adjustment and the requirements of D.C. Code § 32-581.01 et seq.

Wage Transparency: DC's Wage Transparency Omnibus Amendment Act (D.C. Law 25-138) requires disclosure that a position is commission-based.

17. GENERAL PROVISIONS

Entire Agreement: This Agreement constitutes the entire agreement between the parties concerning commission compensation and supersedes all prior agreements on this subject.

Severability: If any provision is found invalid or unenforceable, the remaining provisions shall continue in full force and effect.

Amendment: This Agreement may only be amended in writing signed by both parties.

Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original.

18. SIGNATURES

By signing below, both parties acknowledge they have read, understand, and agree to the terms of this Agreement.

EMPLOYER

Signature: [________________________________]
Printed Name: [________________________________]
Title: [________________________________]
Date: [__/__/____]

EMPLOYEE

Signature: [________________________________]
Printed Name: [________________________________]
Date: [__/__/____]

SOURCES AND REFERENCES

• D.C. Code § 32-1301 et seq. — Wage Payment and Collection Law
• D.C. Code § 32-1302 — When Wages Must Be Paid
• D.C. Code § 32-1303 — Payment Upon Termination
• DC Non-Compete Ban — Ban on Non-Compete Agreements Amendment Act