Sales Compensation and the meaning of "draw"

HRlifer

Good afternoon. We are beginning to realize that we have several top managers involved with establishing Sales compensation who have their own definition of "draw". And those definitions are of course, are different and conflicting. I am interested in getting input from other HR Professionals on how you or your company would define "draw" in a sales compensation plan. I appreciate your help!

wmh

I was payroll administrator for an automobile dealership for 9 years. We defined "draw" as an advance on commissions earned. However, we did have a minimum draw which sometimes would be higher than commissions earned at the time the draw was paid, but since you have to pay commissioned employees at least the equivalent of minimum wage for hours worked, the minimum draw could go against that minimum wage if their commissions for the month were very low.