Commission / Sales Compensation Agreement - Wisconsin

COMMISSION / SALES COMPENSATION AGREEMENT

Before you use this: This agreement is for an employee. Use a separately reviewed contract for an independent sales representative. Check minimum-wage, overtime, and exemption requirements before selecting a commission-only arrangement.

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

1. PARTIES AND EFFECTIVE DATE

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

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: [________________________________]

Classification:

• ☐ 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 the [____] day, with earned commissions paid within the applicable Wis. Stat. § 109.03(1) window
• ☐ Semi-monthly, in accordance with regular payroll
• ☐ Other lawful schedule: [________________________________]

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:

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

Repayment Terms (Recoverable Draw):
[________________________________]

A recoverable draw does not by itself authorize a deduction from wages or create an automatic personal repayment obligation. Any reconciliation or recovery must comply with Wisconsin wage law.

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:
[________________________________]

This section does not itself authorize a wage deduction for faulty work, loss, theft, or property damage. The Company must apply Wis. Stat. § 103.455 when that statute governs a proposed deduction.

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 as follows:

• For Employees Other Than Commission-Basis Sales Agents: If no definite-term written contract applies, by the earlier of the established-payroll date or the payment date required under Wis. Stat. § 109.03(1), as provided by § 109.03(2)
• For Commission-Basis Sales Agents: Section 109.03(2) expressly excludes this category; payment timing must be determined under the governing agreement and other applicable law

Commissions on Pending Sales:

• ☐ Employee is entitled to commissions on deals substantially procured by Employee but closed within [____] days after termination
• ☐ No commission accrues on a deal not closed before termination, if that deal has not already met the earning conditions in Section 5
• ☐ 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 (subject to Wis. Stat. § 103.465).

☐ 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 Wisconsin.

Venue: [________________________________] County, Wisconsin

Dispute Resolution Method:

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

15. TERMINATION PROVISIONS

Employment Relationship: The parties agree that employment is at-will unless a separate signed agreement states otherwise.

Notice of Termination:

• ☐ At-will; no contractual notice required by either party, subject to applicable law
• ☐ [____] 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 may propose changes to this commission plan with [____] days' written notice. A change takes effect only in a writing signed by both parties under Section 17. Changes apply prospectively only and do not affect commissions already earned.

16. WISCONSIN-SPECIFIC LEGAL NOTES

Commissions Are Wages (§ 109.01): Wisconsin law classifies commissions earned over and above a salary as "wages" entitled to full statutory protection.

Deduction Restrictions (§ 103.455): An employer may deduct from an employee's wages for faulty work, loss, theft, or property damage only through a permitted route: the employee's written authorization after the loss and before the deduction, a fault determination made jointly with a representative the employee designates, or a court finding of guilt or liability. This agreement itself is not authorization for a later deduction.

Written Commission Terms: The parties use this agreement to define when commissions are earned and paid. Wis. Stat. § 103.34 regulates traveling sales crews; it does not impose a general written-commission-agreement requirement.

Wage Payment (§ 109.03): The statutory payment-frequency rule and its listed exceptions apply. For an employee without a definite-term written contract, other than a commission-basis sales agent, wages after discharge or resignation are due by the earlier of the regular payroll date or the payment date required by § 109.03(1). Section 109.03(2) excludes commission-basis sales agents from that specific final-pay rule; their payment terms still require separate review under applicable wage law.

Non-Compete — No Blue Pencil (§ 103.465): Wisconsin does not reform overbroad non-compete agreements. If any restriction is unreasonable, the entire covenant is void.

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

• Wis. Stat. § 103.455 — Deductions for Faulty Workmanship, Loss, Theft
• Wis. Stat. Chapter 109 — Wage Payment and Claims
• Wis. Stat. § 103.465 — Restrictive Covenants