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Posted: 2002-01-21 09:05
Can you give me the industry definition of a "Non-Recoverable Draw" within the sales arena. I know what a recoverable draw is, but not the other.
thanks,
nork2
Joined: Sep 13, 2001 Posts: 1037
Posted: 2002-01-21 09:24
A recoverable draw, as you probably know, is an advance against future earnings or commissions which is repaid (or "recovered") from those earnings.
A non-recoverable draw is an advance which would not be repaid from future earnings or commissions in its most liberal application. Most non-recoverable draws are recoverable only against earnings within the commission period (if commissions are paid monthly, the draw is granted at the beginning of the month and repaid only with commissions earned during the month). Any amount of draw not repaid is forgiven; a "forgiveable draw" is synonymous with "recoverable draw".
Rgreene
Joined: Sep 13, 2001 Posts: 80
Posted: 2002-01-23 12:44
I have seen it used as a guarantee of earnings, e.g.:
You will receive a monthly non-recoverable draw of $2000 per month against commission earnings. That means that each month you will receive your draw or commissions whichever is greater for that month.
sueone
Joined: Oct 01, 2008 Posts: 1
Posted: 2008-10-01 14:29
I am currently on a recoverable draw at my company for 6 months. If I leave the company prior to the 6 month deadline, do you know if I legally have to pay back that draw?
rrupert
Joined: Feb 15, 2006 Posts: 1686
Posted: 2008-10-02 12:02
Are you inside or outside sales? What state are you in?
Do you have any written compensation policy or plan? The answer could very well depend on what is written in that plan/policy. I would suggest running it by a local attorney if you have a copy.
It is possible that they could recover some of the draw. But if you are non-exempt and inside sales, they must pay you at least minimum wages for the hours you worked. If you are exempt inside sales (due the Section 7i exemption for retail sales), they would owe you at least 1 1/2 minimum wage for EVERY hour you worked.
They could subtract out what is owed to you as wages and try to recover the difference.
If you are outside sales, there is a specific federal exemption from both OT and exempt salary requirements. They could try to recover the whole amount.
None of this is to say that they will try to recover, just that they could possibly do so.
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Posted: 2002-01-21 09:05 
