"We will guarantee you $600 a day." Almost every associate offer includes a sentence like this, and it describes two arrangements that are nothing alike.
The difference, on one month
You work 20 days, so the guarantee comes to $12,000. Your percentage that month works out to $9,000.
True guarantee
You are paid $12,000. Nothing is owed. The practice absorbed the $3,000 gap because that is what a guarantee is for.
Draw against future earnings
You are paid $12,000, and $3,000 goes on a running tab. Next month, if your percentage comes to $15,000, you are paid $12,000 and the tab clears. You earned the money twice as far as your bank balance is concerned, once.
Why it matters most exactly when you need it
A guarantee exists for the slow start: a new associate with an empty schedule, a practice building them a patient base. That is the scenario where a draw does the most damage, because three slow months in a row means you begin month four several thousand dollars in the hole, at precisely the moment things start picking up.
There is a worse version. Some draw arrangements are recoverable on termination, meaning if you leave with a negative balance the practice can come after it. Read that clause specifically.
The questions to ask
- Is the guarantee recoverable? This is the actual question. "Recoverable" or "draw against commission" means loan. "Non-recoverable" or "greater of" means floor.
- Greater of, or against? "You are paid the greater of the guarantee or your percentage" is a floor. "Your percentage, with a draw of $600 a day" is a loan.
- Does the guarantee expire? Many run 6 or 12 months and then stop. Fine, as long as you know the date.
- What happens to a negative balance if I leave? Get this in writing.
- Does the guarantee count days I was sent home? If the office cancels your day, whose problem is that?
How to check what you are actually on
Find a month where your production was clearly below the guarantee, and look at what you were paid. Then look at the next good month. If the good month paid you less than your percentage would suggest, you are on a draw and you are paying it back.
If your stub carries a running balance line, that is a draw, whatever anyone called it in the interview.
This is the kind of thing that is obvious in hindsight over six months and invisible month to month, which is the entire argument for keeping your own record of what you produced next to what you were paid.