Commission / Sales Compensation Agreement - Iowa

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. Iowa-Specific Legal Notes
17. General Provisions
18. Signatures

1. PARTIES AND EFFECTIVE DATE

Employer / Principal: [________________________________] ("Company")
Address: [________________________________]
State of Organization: Iowa

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: [________________________________]

Draw/Credit True-Up Period:

• ☐ Monthly
• ☐ Quarterly
• ☐ Other: [________________________________] (not to exceed 12 months)

Commission Statements: The Company shall provide the Employee with a written commission statement on each commission payment date detailing the basis for the commission calculation.

7. DRAW AGAINST COMMISSION

Draw Applicable: ☐ Yes ☐ No

If Yes:

Draw Amount: $[________________________________] per [________________________________]

Draw Type:

• ☐ Credit Against Commission Wages (reconciled under Iowa Code § 91A.3; not automatically an employee debt)
• ☐ Non-Recoverable Draw (guaranteed minimum)

Reconciliation Terms:
Regular true-up interval (not exceeding twelve months): [________________________________]

If a reconciliation produces a negative balance, the Company will not deduct that balance from wages or require repayment unless Iowa counsel confirms and documents a lawful route under Iowa Code § 91A.5. A draw or commission agreement alone does not override the statute's wage-deduction restrictions.

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 have been earned (as defined in Section 5) but not yet paid as of the date of termination shall be paid no later than the next regular payday for the pay period in which the wages were earned, per Iowa Code § 91A.4.

Commission Draw True-Up:
Any difference between credits paid against commission-determined wages and the commissions actually earned shall be paid within thirty (30) days of termination, per Iowa Code § 91A.4.

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.

☐ 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 State of Iowa.

Venue: [________________________________] County, Iowa

Dispute Resolution Method:

• ☐ Litigation in state 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. Draw true-up settled within 30 days per Section 9
3. Company property must be returned within [____] days
4. Outstanding draw balances reconciled under Section 7, without an automatic wage deduction or repayment obligation

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. IOWA-SPECIFIC LEGAL NOTES

Commission Salespeople Covered: Iowa Code § 91A.2 specifically includes "commission salesperson" in the definition of "employee," providing full wage payment protections.

Payment Upon Termination: Iowa Code § 91A.4 requires all earned wages to be paid by the next regular payday. Commission draw differences must be settled within 30 days of termination.

12-Month True-Up Period: Iowa Code § 91A.3 permits credit-against-commission arrangements, with the true-up occurring at regular intervals not exceeding 12 months.

Liquidated Damages: Under Iowa Code §§ 91A.2(6) and 91A.8, an employer who intentionally fails to pay wages is liable for the unpaid wages plus 5% of the unpaid amount for each countable day after the first seven days, excluding Sundays and legal holidays, capped at the unpaid amount, plus court costs and usual and necessary attorney's fees.

Expense Reimbursement Required: Iowa Code § 91A.3 requires employers to reimburse authorized business expenses.

Wage Deduction Restrictions: Iowa Code § 91A.5 prohibits unauthorized wage deductions.

At-Will Employment: Iowa is an at-will employment state.

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

• Iowa Code Chapter 91A — Wage Payment Collection
• Iowa Code § 91A.2 — Definitions
• Iowa Code § 91A.4 — Payment Upon Termination
• Iowa Division of Labor — Wage Information