What Happens if the Employer Has Not Defined When a Commission is Earned?
Many employers do not have a written policy defining when a commission is earned. This is especially true of smaller employers who may only have a handful of people with commissions as part of their compensation.
According to the Attorney General's Office, the default position if there is no written policy is that a commission is earned when a sale is made- in other words, when a customer agrees to buy a product or service that is subject to the commission compensation.
In some businesses there is not a meaningful distinction, for example if payment for the product or service happens at the time of the sale.
Others, however, have longer fulfillment cycles, and may only want to pay commissions when the product is shipped. Others bill for services after the fact, and may want to only pay commissions when payment is received. In those situations, the employer must have a written policy defining the desired triggering event, or commissions will be due at the time of sale.
Learn more here about commission pay under the Massachusetts Wage Act.
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