California recently joined New York in requiring that all sales commission pay plans be in writing. This may seem like common sense since many dealers realize that from a legal and practical standpoint, all commission agreements should be in writing whether its required or not.
Even if you already utilize written pay plans, the questions are how well are they drafted and do they offer the dealership adequate protection? The absence of written pay plans, or poorly-written plans that create confusion or ambiguity, makes it extremely difficult for a dealer to defend against legal challenges.
To avoid these issues, its vital that your pay plans explain exactly how commissions are calculated, when they are earned, and how they can be charged back.
Jim Radogna, president of Dealer Compliance Consultants., Inc., shares some suggestions for best practices in the dealership when it comes to pay plans in order to comply with all aspects both legal and fundamental.The Article Pay Plan Pitfalls appeared first on Automotive Digest.