Commission / Sales Compensation Agreement - West Virginia

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. West Virginia-Specific Legal Notes
17. General Provisions
18. Signatures

1. PARTIES AND EFFECTIVE DATE

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

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 ☐ Other compliant schedule: [________]

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:

• ☐ Bi-weekly, in accordance with regular payroll
• ☐ Semi-monthly, in accordance with regular payroll
• ☐ Monthly, on or before the [____] day of the following month
• ☐ Other: [________________________________]

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, recoverable only through a lawful written arrangement and deductions permitted by applicable law)
• ☐ Non-Recoverable Draw (guaranteed minimum)

Repayment Terms (Recoverable Draw):
[________________________________]

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 as follows:

• On or before the next regular payday on which the wages would otherwise be due and payable (W. Va. Code § 21-5-4)

Commissions on Pending Sales:

• ☐ Employee is entitled to commissions on deals substantially procured by Employee but closed within [____] days after termination
• ☐ A pending sale earns no commission unless the stated earning conditions in Section 5 are later satisfied; this option does not forfeit a commission already earned
• ☐ 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 West Virginia.

Venue: [________________________________] County, West Virginia

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. Company property must be returned within [____] days
3. Outstanding draw balances handled per Section 7 without withholding or deducting earned wages except as applicable law permits

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. WEST VIRGINIA-SPECIFIC LEGAL NOTES

WV Wage Payment and Collection Act (§ 21-5-1 et seq.): Defines "wages" to include compensation on a commission basis. Also includes accrued fringe benefits capable of calculation.

Twice-Monthly Payment Requirement (§ 21-5-3): Employers must settle with employees at least twice every month, with no more than nineteen (19) days between settlements, unless a commissioner-approved special agreement applies.

Final Pay (§ 21-5-4): Upon separation (voluntary or involuntary), all wages due must be paid on or before the next regular payday.

Separated-Employee Safe Harbor (§ 21-5-4A): For an action seeking liquidated damages or attorney fees based on wages or fringe benefits due at separation under § 21-5-4, the employee generally must first send a written demand and the employer has seven (7) calendar days from receipt to correct the alleged underpayment or nonpayment or pay all undisputed amounts. The demand condition does not apply if the employer failed to give the separation notice identifying where demands must be sent, and § 21-5-4A does not bar an employee from presenting the underlying wage claim without a demand.

Liquidated Damages and Attorney Fees (§§ 21-5-4(e), 21-5-4A, and 21-5-12): A final-pay violation under § 21-5-4 can create liability for two times the amount unpaid when due as liquidated damages, subject to § 21-5-4(e)'s limits and § 21-5-4A's safe harbor. In an action under Article 21-5 resulting in judgment, the court may assess costs, including reasonable attorney fees, against the defendant under § 21-5-12(b).

Wage Deduction Restrictions: Section 21-5-3 permits authorized deductions and wage assignments but imposes detailed requirements. Section 21-5-4(f) separately permits a limited final-wage recovery for unreturned employer property only when its itemization, replacement cost, contemporaneous written agreement, notice, demand, deadline, and objection/escrow conditions are satisfied.

Employment Status: Nothing in this compensation plan changes an otherwise at-will relationship or any rights established in a separate written employment agreement or by applicable law.

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

• W. Va. Code Article 21-5 — Wage Payment and Collection
• W. Va. Code § 21-5-1 — Definitions
• W. Va. Code § 21-5-3 — Regular wage settlements
• W. Va. Code § 21-5-4 — Final pay and employer property
• W. Va. Code § 21-5-4A — Written Demand and Cure Period
• W. Va. Code § 21-5-12 — Employee remedies
• WV Division of Labor — Wage Payment and Collection