Commission / Sales Compensation Agreement - Louisiana

COMMISSION / SALES COMPENSATION AGREEMENT

STATE OF LOUISIANA

Table of Contents

1. Parties and Recitals
2. Position and Duties
3. Term of Agreement
4. Commission Structure
5. Base Compensation and Commission
6. Payment Timing
7. Draw Against Commission
8. Clawback Provisions
9. Post-Termination Commission Rights
10. Quota and Performance Standards
11. Territory and Accounts
12. Expenses and Reimbursement
13. Dispute Resolution
14. Termination
15. General Provisions
16. Louisiana-Specific Notices
17. Signatures

1. Parties and Recitals

Employer:
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [____________________], LA [__________]
Phone: [________________________________]
Entity Type: [________________________________]

Employee (Sales Representative):
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [____________________], LA [__________]
Phone: [________________________________]
SSN (Last 4): [____]

Effective Date: [__/__/____]

This Commission / Sales Compensation Agreement ("Agreement") is entered into by and between the Employer and Employee identified above. The parties agree that the Employee's compensation shall be governed by the terms set forth herein, in compliance with Louisiana Revised Statutes Title 23.

2. Position and Duties

Job Title: [________________________________]

Primary Responsibilities:

• [________________________________]
• [________________________________]
• [________________________________]

Reporting To: [________________________________]

Work Location: [________________________________]

Employment Status:
☐ Full-time employee
☐ Part-time employee

3. Term of Agreement

This Agreement shall commence on [__/__/____] and shall continue:

☐ Indefinitely (at-will employment) until terminated by either party
☐ For a fixed term ending on [__/__/____], subject to renewal

If the parties select an indefinite term, either may end the relationship as stated in this Agreement, subject to applicable law. A fixed-term selection requires separate review of its termination terms.

4. Commission Structure

Commission Type:
☐ Percentage of gross sales
☐ Percentage of net sales (after returns and allowances)
☐ Percentage of gross profit
☐ Flat fee per sale or unit
☐ Tiered/graduated commission schedule
☐ Other: [________________________________]

Commission Rate(s):

Commission Trigger Event:
☐ Upon execution of the sale or contract
☐ Upon delivery of goods or services
☐ Upon receipt of customer payment
☐ Other: [________________________________]

5. Base Compensation and Commission

Base Salary: $[________] per [☐ hour / ☐ week / ☐ month / ☐ year]

Total Compensation Structure:
☐ Base salary plus commission
☐ Commission only (confirm that the selected structure satisfies applicable wage-and-hour law before use)
☐ Draw against commission (see Section 7)

6. Payment Timing

Commission Payment Schedule:
☐ Each regular pay period
☐ Monthly, on or before the [____] day of the following month
☐ Other: [________________________________]

Regular Pay Period: [________________________________]

Commissions shall be calculated and paid no later than [____] days after the end of the period in which the commission was earned.

7. Draw Against Commission

☐ This section applies / ☐ This section does not apply

Draw Amount: $[________] per [☐ week / ☐ pay period / ☐ month]

Draw Type:
☐ Recoverable draw (advances offset against future commissions)
☐ Non-recoverable draw (guaranteed minimum, not offset)

Negative Balance: If commissions earned are less than draws paid:
☐ The deficit is tracked against future unearned commission opportunities, subject to applicable wage law; it is not automatically an employee debt or deduction from earned wages
☐ The deficit is forgiven at the end of each [☐ month / ☐ quarter / ☐ year]
☐ Other: [________________________________]

8. Clawback Provisions

☐ This section applies / ☐ This section does not apply

The written commission policy may adjust an amount that has not yet become earned under the selected trigger, when a change to the order affects that amount as permitted by La. R.S. 23:631(E). A commission already earned or paid is not automatically recoverable or deductible from wages; use only a separately documented lawful recovery route. Select any adjustment event that is part of the written earning policy:

☐ Customer cancels order within [____] days of sale
☐ Customer returns product within [____] days
☐ Customer defaults on payment within [____] days
☐ Other: [________________________________]

Maximum adjustment period before earning: [____] days from the transaction date, subject to the stated earning trigger and applicable law.

9. Post-Termination Commission Rights

Upon termination of employment (whether voluntary or involuntary), the Employee shall be entitled to:

☐ All commissions earned and unpaid through the last day of employment
☐ Commissions on sales closed but not yet paid by customers as of termination
☐ Commissions on pending orders submitted before the termination date that close within [____] days after termination
☐ No commission for work first performed after separation; commissions earned under this Agreement before or after separation remain payable under their written earning terms and applicable law

Payment of Final Commissions:

• Discharge: Under La. R.S. 23:631, upon discharge, commissions that have been earned and are an "amount then due" must be paid on or before the next regular payday or within fifteen (15) days of discharge, whichever occurs first.

• Resignation: For commissions that are an amount then due, payment is due by the earlier of the next regular payday for the pay cycle in which the Employee worked at separation or fifteen days after resignation, subject to La. R.S. 23:631's terms and exceptions.

10. Quota and Performance Standards

Sales Quota:
☐ Monthly quota: $[________]
☐ Quarterly quota: $[________]
☐ Annual quota: $[________]

Consequences of Failing to Meet Quota:
☐ Performance improvement plan
☐ Prospectively reduced commission rate of [____]% after written notice; no retroactive change to commissions already earned
☐ Reassignment of territory or accounts
☐ Grounds for termination
☐ Other: [________________________________]

11. Territory and Accounts

Assigned Territory: [________________________________]

Account Assignment:
☐ Exclusive territory — Employee is sole representative in the defined area
☐ Non-exclusive territory — Employer may assign additional representatives
☐ Named accounts only (see attached Exhibit A)

Territory Modifications: Employer reserves the right to modify territories with [____] days' written notice.

12. Expenses and Reimbursement

Reimbursable Expenses:
☐ Mileage at IRS standard rate ($[____] per mile)
☐ Travel expenses (airfare, lodging, meals) with prior approval
☐ Client entertainment with prior approval up to $[________] per [☐ month / ☐ quarter]
☐ Office supplies and equipment
☐ Other: [________________________________]

Expense Reporting Deadline: Expenses must be submitted within [____] days of being incurred.

13. Dispute Resolution

In the event of a dispute arising out of or relating to this Agreement:

Step 1 — Internal Resolution: The parties shall attempt to resolve the dispute through good-faith negotiation within [____] business days.

Step 2 — Mediation/Arbitration:
☐ Binding arbitration in [________________________________], Louisiana, under the rules of [________________________________]
☐ Mediation before [________________________________]
☐ Litigation in the courts of Louisiana, [________________________________] Parish

14. Termination

By Employer:
☐ At will, with or without cause
☐ For cause, including but not limited to: [________________________________]
☐ With [____] days' written notice

By Employee:
☐ At will, with or without cause
☐ With [____] days' written notice

Effect of Termination: Upon termination, all company property, client lists, and proprietary materials must be returned within [____] business days. Commission payments after termination shall be governed by Section 9.

15. General Provisions

Entire Agreement: This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements.

Amendments: This Agreement may be modified only by written instrument signed by both parties. Commission rate changes require [____] days' advance written notice to Employee.

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

Applicable Law; No Pre-Incident Selection: Applicable law governs each claim. This Agreement does not impose a pre-incident choice-of-law or choice-of-forum clause prohibited by La. R.S. 23:921(A)(2).

Confidentiality: Employee shall protect nonpublic proprietary sales information while it remains confidential. Nothing restricts wage or commission discussion, protected labor activity, an agency charge, a government report, testimony, or another disclosure protected by law.

16. Louisiana-Specific Notices

Final Pay Upon Termination: Under La. R.S. 23:631(A)(1), amounts then due after discharge must be paid by the earlier of the next regular payday or 15 days after discharge. After resignation, use the next regular payday for the pay cycle in which the employee worked at separation or 15 days after resignation, whichever comes first. Subsections (D) and (E) govern when vacation or variable compensation is an amount then due, subject to the statute's other exceptions.

Commission Policy: La. R.S. 23:631(E) addresses when earned commission, incentive pay, or bonus is an "amount then due" and permits specified adjustments under a written policy. State the earning conditions and permitted adjustments clearly in this Agreement or a referenced written policy.

Bonus Determination Period: For a bonus determined from periodic financial performance information, La. R.S. 23:631(E)(3) allows a reasonable period of no more than 120 calendar days after the period ends to determine whether a bonus is due and its amount.

Penalty for Non-Payment: Under La. R.S. 23:632(A), a noncompliant employer may owe the lesser of 90 days' wages or full wages from demand to tender. Subsection (B) limits recovery for a good-faith disputed amount to that amount plus judicial interest from suit. Subsection (C) allows reasonable attorney fees after a well-founded unpaid-wage suit filed at least three days after the first post-separation demand.

Undisputed Amounts: Under La. R.S. 23:631(B), in case of a dispute, the employer must pay the undisputed portion by the subsection (A) deadline.

Pay Frequency: La. R.S. 23:633(A) requires covered employers to inform employees at hire of their wage rate, payment method and frequency, and later changes. Subsection (B)'s twice-monthly rule applies only to its specified employers and generally excludes salespeople except at public service corporations. Section 23:634(A) prohibits a contract that forfeits wages actually earned merely because employment ends before a contract is complete.

17. Signatures

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

EMPLOYER:

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

EMPLOYEE:

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

ACKNOWLEDGMENT OF RECEIPT

☐ Employee acknowledges receipt of a signed copy of this Agreement on [__/__/____].

Sources and References:

• La. R.S. 23:631, § 23:632, § 23:633, § 23:634, and § 23:921
• Louisiana Workforce Commission: https://www.laworks.net