Can You Take Legal Action Over Nonpayment Of Commission?

A violation of the law may exist if you have earned commissions, but your employer has yet to pay you for them. Employers must pay commission that has been earned and/or promised.

Nonpayment of commission is, unfortunately, not an uncommon occurrence. After seeking payment of commissions or complaining about not receiving their commissions, it is not uncommon for retaliation to be experienced by an employee. Whether you’re missing commissions that you earned, or you feel that your employer has retaliated against you for some reason, don’t hesitate another minute to contact an attorney experienced in employment and all of the laws and regulations surrounding it.

Commissions – What Are They?

Based on a percentage of/for services sold by an employee or payment received for products from an employer, commissions are earnings by an employee. A salesperson might receive hybrid compensation consisting of both commissions and wages or they may be solely paid on the basis of commissions.

Bonuses and commissions differ, however. Not based on any stated reason or objective criteria, some monies paid to an employee are a discretionary bonus. It is completely within an employer’s discretion what type of bonus will be paid. When money is promised to an employee, in the case of a nondiscretionary bonus, it is on the terms of a bonus plan that becomes binding once an employee begins to perform under plan terms, according to those terms.

Overtime laws and minimum wage laws still do protect some commissioned salespersons, however. Whether the salesperson works outside or inside the place of employment, a number of factors can figure in:

  • The amount of compensation earned
  • The nature of the work
  • The percentage of earnings coming from commissions

Seek legal advice if you’re unsure whether or not you’re entitled to overtime compensation.

Earned Commissions

With an employer, an employee must enter into a written agreement if that employee’s compensation consists of commission. How the calculation of commission will be done needs to be contained within the written commission agreement. When and how commission is earned will also be part of the agreement.

Seek legal advice if you are a commissioned employee but have not signed a written commission agreement with your employer.

Commission Payouts

Upon earning a commission, within the same schedule as other wages, it must be paid. This could constitute at least twice a month depending on the state in which you are employed. To cover the payroll period in which the commission was earned, when paychecks are issued, a commission payment should be made.

When employees are laid off, terminated, or quit, special rules apply as to when they must be paid their commissions.

Commission Nonpayment Retaliation

It is against the law, if you complain about or ask about unpaid commissions, for your employer to retaliate against you. In order to avoid paying an employee commissions, an employer cannot terminate them. If an employee provides information to an agency of the government, again, they cannot be retaliated against by their employer. Retaliation can include the following:

  • Discipline
  • Suspension
  • Demotion
  • Termination

But, in order to pursue legal action against an employer, that employer must have retaliated against the employee solely because they were seeking commissions that were unpaid, provided agency information, etc.

Turn to Carcich O’Shea For Legal Assistance Regarding Commission Nonpayment

Do you feel that you were owed commission payments but have yet to receive them? Maybe you’ve been trying to talk to your employer about it, but no one wants to listen. At Carcich O’Shea, LLC, we know that you deserve to be heard. We will listen. Where New York and New Jersey’s employment laws are concerned, we demonstrate complete knowledge and represent the rights of our clients.

Contact us today if you’d like to discuss getting paid for the unreceived commission owed you.

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