Commission / Sales Compensation Agreement - Mississippi

COMMISSION / SALES COMPENSATION AGREEMENT

STATE OF MISSISSIPPI

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. Mississippi-Specific Notices
17. Signatures

1. Parties and Recitals

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

Employee (Sales Representative):
Name: [________________________________]
Address: [________________________________]
City/State/ZIP: [____________________], MS [__________]
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 applicable Mississippi law and the federal Fair Labor Standards Act (FLSA).

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 is selected, either party may end the relationship, with or without cause or advance notice, subject to applicable law and any controlling signed 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 (confirm applicable minimum-wage and overtime requirements; see Section 7)
☐ Draw against commission (see Section 7)

6. Payment Timing

Commission Payment Schedule:
☐ Each regular pay period
☐ Semimonthly (if required by Miss. Code Ann. § 71-1-35 for this employer)
☐ Monthly, on or before the [____] day of the following month (only if applicable law permits this schedule)
☐ 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 carries forward to the next period(s)
☐ The deficit is forgiven at the end of each [☐ month / ☐ quarter / ☐ year]
☐ Other: [________________________________]

8. Clawback Provisions

The selected earning event and calculation in Section 4 determine whether a commission is due. This Agreement imposes no clawback of commissions after they have been earned and paid, including for a customer's later cancellation, return, default, or nonpayment. Any payment intended as an advance before a commission is earned must be identified as such when the parties agree to it and documented separately.

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 commissions on transactions first earned after the last day of employment, except as otherwise stated here: [________________________________]

Payment of Final Commissions: All earned and unpaid commissions shall be paid no later than the next regularly scheduled payday following separation, subject to any earlier payment required by applicable law, including Miss. Code Ann. § 71-1-35 where it applies.

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 [________________________________], Mississippi, under the rules of [________________________________]
☐ Mediation before [________________________________]
☐ Litigation in the courts of the State of Mississippi, [________________________________] County

14. Termination

By Employer:
☐ At will, with or without cause (only if the indefinite term is selected in Section 3)
☐ For cause, including but not limited to: [________________________________]
☐ With [____] days' written notice

By Employee:
☐ At will, with or without cause (only if the indefinite term is selected in Section 3)
☐ 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 Mississippi and applicable federal law.

Protected Discussions and Proprietary Information: Nothing in this Agreement restricts discussions of wages, commissions, hours, or working conditions where protected by law; concerted activity protected by 29 U.S.C. § 157 where it applies; or lawful reports and communications with government agencies. Employee shall protect nonpublic customer lists, pricing strategy, and other lawfully protectable proprietary sales information, subject to those rights.

16. Mississippi-Specific Notices

Wage-law coverage: Determine which federal wage rules cover this employer and employee, whether an exemption applies, and whether Miss. Code Ann. § 71-1-35 governs the employer's payment schedule.

Federal Minimum Wage: For employment covered by 29 U.S.C. § 206(a)(1)(C), the federal minimum is $7.25 per hour, subject to applicable statutory exceptions and any higher applicable rate. A commission-only plan must still satisfy the wage rules that apply to the position.

Payment Frequency: Miss. Code Ann. § 71-1-35 requires payment at least once every two weeks or twice monthly for manufacturers employing at least 50 employees and public labor, and for public-service corporations; it excludes bona fide executive, administrative, and professional employees. Covered payments include services performed through no more than 10 days before payday, or 15 days for public-service corporations.

Overtime — Retail/Service Commission Exemption: Under 29 U.S.C. § 207(i), all three conditions must be met: (1) the employee works for a retail or service establishment; (2) the employee's regular rate exceeds 1.5 times the applicable minimum wage in each workweek in which overtime hours are worked; and (3) more than half the employee's compensation in a representative period consists of commissions. The period is at least one month; 29 C.F.R. § 779.417 explains why a period longer than one year ordinarily is not representative.

Outside Sales Exemption: Under 29 C.F.R. § 541.500, the exemption applies when the employee's primary duty is making sales or obtaining orders or contracts for services or facilities and the employee is customarily and regularly engaged away from the employer's place or places of business in performing that duty. The regulation does not impose the Part 541 salary requirements on qualifying outside-sales employees.

Deductions and Chargebacks: Document any proposed advance, adjustment, or chargeback in the compensation terms before it is used; apply only amounts permitted by those terms and applicable wage law.

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:

• Miss. Code Ann. § 71-1-35: https://unicourt.github.io/cic-code-ms/transforms/ms/ocms/r78/gov.ms.code.title.71.html#t71c01s71-1-35
• Federal FLSA — 29 U.S.C. §§ 206–207: https://uscode.house.gov/us/usc/119-136/t29/s207/
• 29 C.F.R. § 541.500 (Outside Sales Employees): https://www.ecfr.gov/current/title-29/section-541.500
• 29 C.F.R. § 779.417 (Commission Representative Period): https://www.ecfr.gov/current/title-29/part-779/section-779.417