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1099 Commission Termination after 90 days of non-production

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  • 1099 Commission Termination after 90 days of non-production

    As a 1099 sale rep, is it legal for my company to impose a termination of my residual commissions/payments after 90 days of non-production on my part?

  • #2
    If you are an IC who will be receiving a 1099 at the end of the year, employment law does not apply to you. All that matters is what it says in your contract.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      Agreed, although it sort of beggars the question of whether or not you were legally an independent contractor (IC). All workers are either employees or IC, with the legal default being employee. The "employer" (IC have customers, not employer) must be able to show that the worker is really an IC. An IC is legally an arm's length vendor, like RotoRotor. I have been on the other side of the issue you describe. A legitimate IC of a company's product is basically like an auto dealer selling a manufacturer's product.

      You need to take your contract to a local attorney to read. IC are subject to contract law only. Labor law is a function of employees only, and if you are not an employee, then labor law is off the table.

      The following are federal DOL rules on worker classification. Read through this and see if you test out as employee or IC. If you think that you legally are an employee, then you still probably need to see a local attorney, but the issues change (a lot). It then would become very Dependant on exactly which state you are in (state law varies a lot in this area), and it would be very important on exactly which FLSA exceptions (if any) you were subject to. Like the Outside Sales exception.
      http://www.dol.gov/esa/whd/regs/compliance/whdfs13.pdf
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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