Commission / Sales Compensation Agreement - Maine

COMMISSION / SALES COMPENSATION AGREEMENT

STATE OF MAINE

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. Commission Adjustments
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. Maine-Specific Notices
17. Signatures

1. Parties and Recitals

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

Employee (Sales Representative):
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [____________________], ME [__________]
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 Maine Revised Statutes Title 26, Chapter 7.

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 indefinite-term option is selected, the parties intend an at-will relationship, subject to applicable law and the wage rights preserved in this Agreement.

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 (see Draw provision in Section 7)
☐ Draw against commission (see Section 7)

6. Payment Timing

Commission Payment Schedule:
☐ Each regular pay period
☐ Other: [________________________________]

Regular Pay Period: [________________________________]

The parties will record when a commission is earned and the applicable payment date in Exhibit A. Once earned, commissions that are wages must be paid on the established payday as required by 26 M.R.S. § 621-A. For employees covered by subsection 1, wage payments must occur at intervals no longer than 16 days; a monthly calculation cycle does not extend the statutory pay interval.

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 carries forward to the next period(s)
☐ The deficit is forgiven at the end of each [☐ month / ☐ quarter / ☐ year]
☐ Other: [________________________________]

Any reconciliation or repayment of a draw must comply with 26 M.R.S. § 629 and other applicable wage law. Section 635 excludes draws and advances from its overcompensation definition and does not itself authorize a deduction. Record the advance and reconciliation method in Exhibit A.

8. Commission Adjustments

☐ This section applies / ☐ This section does not apply

The following events may adjust a commission before it is earned under the agreed trigger in Section 4. They do not authorize withholding or recovery of earned wages. Any proposed repayment of a previously paid commission requires a separate review under 26 M.R.S. §§ 629 and 635 and other applicable law.

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

Maximum pre-earning adjustment period: [____] days after the sale event, subject to the earning trigger in Section 4.

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. The parties may select additional rights below:

☐ 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 additional commissions on sales first earned after termination beyond those stated above

Payment of Final Commissions: Under 26 M.R.S. § 626, wages earned at cessation of employment must be paid in full no later than the next established payday. Later-earned contractual commissions are payable on the date specified in Exhibit A, subject to applicable wage law.

10. Quota and Performance Standards

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

Consequences of Failing to Meet Quota:
☐ Performance improvement plan
☐ Reduced commission rate of [____]%
☐ 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 [________________________________], Maine, under the rules of [________________________________]
☐ Mediation before [________________________________]
☐ Litigation in the courts of the State of Maine, [________________________________] County

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.

Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the State of Maine.

Protected Discussions and Proprietary Information: Nothing in this Agreement prohibits an employee from discussing wages, commissions, hours, or working conditions; engaging in protected concerted activity; reporting suspected unlawful conduct; or communicating with a government agency. Employee shall protect nonpublic customer lists, pricing strategy, and other lawfully protectable proprietary sales information, subject to those rights.

16. Maine-Specific Notices

Payday and Rate Notices: Under 26 M.R.S. § 621-A, the established payday or date must be made known to the Employee. Increasing the pay interval requires at least 30 days' written notice, and a pay-rate decrease generally requires notice before the change takes effect.

Pay Frequency: For employees covered by 26 M.R.S. § 621-A(1), wages must be paid at regular intervals not exceeding 16 days. Any increase in the pay interval requires 30 days' written notice under subsection 2.

Minimum Wage: Under 26 M.R.S. § 664, Maine's statewide minimum wage is $15.10 per hour effective January 1, 2026, subject to annual adjustment and any higher applicable local rate. Commission earnings must be sufficient to satisfy applicable minimum-wage requirements for all covered hours worked.

Overtime: For employees covered by 26 M.R.S. § 664(3), overtime is required at 1.5 times the regular hourly rate for hours actually worked over 40 in a week. Commissions paid or due for work performed are included in that rate, subject to the section's stated exceptions.

Final Pay: Under 26 M.R.S. § 626, wages earned at cessation of employment must be paid no later than the next established payday.

Overcompensation: Section 635 excludes commissions, draws, and advances from its definition of "overcompensation." The statute does not itself authorize a commission clawback. Section 629 restricts agreements requiring an employee to return compensation.

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 [__/__/____].

Exhibit A — Commission Earning and Payment Schedule

Employer initials: [____] Employee initials: [____]

Sources and References:

• Maine Revised Statutes Title 26, Chapter 7: https://legislature.maine.gov/statutes/26/title26ch7sec0.html
• Maine Department of Labor: https://www.maine.gov/labor
• 26 M.R.S. § 621-A: https://legislature.maine.gov/statutes/26/title26sec621-A.html
• Maine Department of Labor, 2026 minimum-wage announcement: https://www.maine.gov/labor/news_events/article.shtml?id=13270099