Can a Company Offer Jobs with Only Variable Pay? Seeking Advice on Commission vs. Contract

Hi Friends,

I seek advice from all of you on a situation as follows:

Can an organization give an appointment to any candidate on variable pay, i.e., no fixed salary? If the terms of remuneration are something like a percentage of net revenue generation per month by the candidate.

Now, my question is if the above is not possible, then should the candidate be given an appointment on a commission basis or on a contract basis?

It would be of great help if anybody could provide me a format of both types of letters (On Commission basis & On Contract basis).

Thank you and expecting a good amount of feedback from my HR friends.

Suchandra

As far as my knowledge goes, you have to set aside a certain amount as fixed basic pay. You have to set aside a fixed amount. This amount can be negotiated, and you can try your best to keep it as low as possible, but you have to provide some fixed basic pay. The remaining can be performance-based.

I hope that helps. I'm sorry as I don't have any formats as such.

Hi Everybody,

Any format for appointing someone on a commission basis or contract basis. Please, guys, I need the same. It's really urgent.

Thanks,
Suchandra

Hi there,

I have not encountered or dealt with such a situation personally, but I have heard of it. If I am not mistaken, this practice is utilized by organizations that do not want to list employees officially to avoid expenses like PF contributions. They typically refrain from issuing any employment letter to prevent individuals from claiming employment status. In my opinion, this is not a recommended approach.

I would like to suggest the following steps:
1) Draft a letter resembling a consultant hiring agreement.
2) Clearly outline the terms and conditions governing remuneration.
3) Propose a base payment amount along with any potential reimbursements such as conveyance, if necessary.
4) Specify a fixed duration for the employment period.

Finally, PLEASE HAVE THE DOCUMENT REVIEWED BY A LAWYER BEFORE DISTRIBUTION to ensure that all necessary details are included.

I hope you find this information helpful.