Wage Act Violation: Unpaid Commissions at Termination
Paul worked as a salesperson for a company that sold employee inventive rewards platforms to employers. He was paid a salary plus commissions that were paid out on a quarterly basis.
After the first quarter of 2019, Paul's employment was terminated. The company refused to pay him any of his commissions for Quarter One, claiming that there had been a refund issued that was equal to his earnings in that quarter. Neither the company's written commission policy nor Paul's offer letter contained any provision for offsetting commissions by customer refunds, and all of the disputed commissions had been earned prior to his termination. Wage Act SolutionAfter reviewing Pauls' personnel records and the company's commission policy, we brought a claim under the Wage Act for unpaid commissions. Shortly after filing the complaint, we were able to negotiate a settlement that compensated Paul for the unpaid commissions.
PostscriptIf you rely on commissions as a significant part of your compensation, remember that once you have earned those commissions under whatever policy your employer has in place, those commissions are considered wages, and must be paid timely. This means they also must be paid at termination, even if the regular time for payout of commissions has not yet occurred.
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