SALES RECRUITMENT AGENCIES, SALES RECRUITMENT AGENCY, SALES STAFF

Sales Compensation Plan Policies & Procedures (Sample Text)

Account or Territory Changes

A Participant who is given a revised quota due to a change in accounts or territory during the fiscal quarter or annual measurement period will retain all commission payments earned through the effective date of the change, subject to all other terms and conditions in this Plan. Future calculations will be based on the new account/territory. Account and territory changes are effective for the entire month. There are no mid-month changes. Changes to quota, accounts or territories will be made in writing to the Participant.

Authorized Leave of Absence

The Participant will not earn commissions for deals closed while out on an authorized leave of absence. Any commission payable during the leave will be paid out upon return to work per the terms of the compensation plan. Upon returning from an authorized leave of absence, the participant is eligible to receive commissions and bonuses based on their plan. Quota or rates will not be prorated. Should a participant not return to work after the approved leave, the participant will be paid for commission payments earned prior to the end of the paid portion of the approved leave, provided that the payments are received by the company within 30 days from the last day of the paid portion of the leave.

Employment at Will

Eligibility and participation in the Plan in no way implies or reflects any guarantee or contract of employment since the company operates on an employment-at-will basis. Participation in this Plan does not confer any right to continue in the company's employ or limit the right of the company to terminate the Participant at any time, with or without cause.

New Hires

Participants who are hired mid-year from outside the company into an eligible position covered by this Plan will be assigned goals for the remainder of the fiscal year and will be eligible to earn commissions according to the standard rates. The new hire sales person should receive prorated quota, account assignment responsibility and credits as soon as practical after the start date.

Performance Improvement Plan

Bonus eligibility is based on a Participant performing the main functions of their job at an expected performance level. Therefore, any Participant that is on a Performance Improvement Plan or similar remedial performance plan during a given period will not be eligible to receive a bonus for that period.

Quota Change

Occasionally it is necessary to change quota. Quotas are effective for the full month of the point of change. There will be no partial month quota changes. All future commission and bonuses earned will be calculated based on the new revised quota. Changes to quotas will be made in writing to the Participant.

Rate Change

Rate changes are effective for the full month of the point of change. There will be no partial month rate changes. There is no retroactive change for commissions and bonuses earned. All future commission and bonuses earned will be calculated based on the new revised rates. Changes to rates will be made in writing to the Participant.

Termination

Participants who voluntarily or involuntarily terminate employment with the company whether or not for cause will be paid their base salary through the agreed upon termination date. In addition, the Participant will be eligible only for commission payments earned prior to their last date of employment. The Participant must also return all company documents and property and settle any financial obligations owed to the company.

Transfers to a New Plan

Participants who transfer to a new plan will continue to earn any incentives for all the business credited through the effective date of the change, subject to all standard terms and conditions of this Plan. Future commission payments will be according to the terms and conditions of the new plan. All changes will be effective for the full month at the point of change. Changes to plans will be made in writing to the Participant.

Administration

Active at time of Payment

A Participant must be an active employee at the time the applicable cash bonus payment is made in order to receive the bonus award which he/she may have earned for that previous quarter.

Ambiguities and Inconsistencies

Should there be any questions of interpretation regarding payments or earned amounts, the final authority for interpretation will reside with the Sales Manager and the Chief Financial Officer.

Calculation of Taxes

Where a commission is paid for a single pay period (one week,one fortnight or one month), the amount is added to any other payment for that period. An amount should be withheld from the total payment in accordance with the applicable PAYG withholding tax table. The gross payment amount and the withheld amount should be reported on the payee’s payment summary with other normal salary or wage payments.

For further details, refer to: The Australian Taxation Office 

Changes to the Plan

The company reserves the right to amend, modify, or terminate this Plan at any time, but such change will be made in writing by the Sales Manager to all Participants as far in advance as possible of the effective date of such change.

Conformance with State and Federal Law

If any term or condition of this Plan is found to be in non-conformance with a given state or federal law that term or condition will be non-enforceable but will not negate other terms and conditions of the Plan. However, the company will review and modify the overall plan to conform to such law.

Draw

Draw is a cash advance for a participant when specified in an offer letter and may either be recoverable or non-recoverable. It is paid monthly. Draw is paid net of earnings so the total draw plus the earnings will never exceed the draw amount. If the earned incentives for that period are above the draw amount, no draw is paid.

Effective Date

This plan is effective and applies to all contracts entered into between January I, 20XX and December 31, 20XX and supersedes all plans and terms previously in effect.

Overpayment

When a Participant is overpaid incentive earnings, the Participant is obligated to repay the Company. Overpayments can result from a cancellation, processing or crediting errors, and other related causes. The Participant is responsible for identifying to their manager when an error has occurred. Managers are accountable to monitor the performance and payments to their employees to minimize the occurrence of errors and to resolve problems quickly. The overpayment is a liability of the Participant to the Company until it is fully repaid.

Prior to an incentive payment in the current period, all liabilities will be taken into account and the current incentive payment will be reduced by the liability amount until all the liability had been refunded to the Company. If the liability exceeds the current period incentive earnings, then the payment will be $0.

All types of earnings and bonuses are used to pay off liabilities. After all incentive earnings and bonuses have been applied and there is still a liability balance, then that liability balance is carried forward into the next payment period.

Upon termination, any liability will be paid in full from final incentives due the employee. If there is a remaining liability after all the final incentives are considered, the employee wages, accrued vacation, bonuses, and any other sources will be applied to the liability balance prior to final payment, when applicable under the law.

Payment

The Company will make reasonable efforts to pay commissions and bonuses within 30 days after the end of each period.

Recovery

Overpayments may result from cancelled orders, splits, etc. and are recoverable against all incentive earnings. That is, 100% of the earned incentives are applied to repayment until the overpayment has been paid in full. If there is not enough earned incentives to pay off the overpayment in the current month a liability is created. This liability will be carried forward until the overpayment balance is zero. Upon termination, any remaining liability will be deducted from any amount due to the employee for wages, accrued vacation, bonuses, etc.

Arbitration

Disputes

All disputes which involve claims for $3,000 or more, and which arise out of the participant's employment or termination thereof, whether or not such claims are based exclusively on the terms of this Plan, shall be submitted to binding arbitration in Australia if the parties are unable to resolve their dispute within thirty (30) days after exercising good faith efforts. The Commercial Arbitration Rules of the Australian Government's Fair Work Ombudsman shall apply to all aspects of the arbitration between the parties. The parties agree that after arbitration has been initiated; all other civil actions between the parties shall be stayed until after the arbitration proceeding is concluded.

This Plan shall be governed in all respects by the state and federal laws of Australia.  The arbitrators shall honour the terms and conditions of the Plan and construe it in accordance with the laws of Australia. The arbitration shall be binding on the parties and be honored by them without resort to any further court proceedings. Neither party may demand arbitration or institute any lawsuit in any form arising out this Plan, or arising in any way out of the employment relationship between the parties, more than two (2) years after the claim or cause of action has arisen.

The company is an Equal Opportunity Employer committed to a diverse workforce. The Company will not discriminate on the basis of race, color, religion, age, sexual orientation, national origin, physical or mental disability, or veteran status.

For further details, refer to: Fair Work Ombudsman