Unpaid commissions are not uncommon in the workplace. Unscrupulous employers have certain tactics that they use to pay their employees’ lower commissions or to get out of paying their employees’ commissions entirely. When this happens, employees may have no choice but to file a lawsuit. Read all about unpaid commissions below to understand more about this type of case.
Understanding Unpaid Commissions
A commission is a certain amount of money paid to perform certain tasks or duties. Some employers use commissions, especially in sales roles, to encourage their employees to work harder by putting them in charge of the amount of money they can make at any given time. However, such commissions can sometimes go unpaid.
Why Should You Hire Attorneys for Unpaid Commission Claims?
When you believe that you have not been paid the commissions you are due, it can be a very stressful period for you. An attorney can help you to analyze your specific situation and advise if you can file an unpaid commission lawsuit. They can also give you insight on whether you could potentially recover damages and other remedies, including liquidated damages. If a lawsuit is required, an attorney can help you to achieve a successful resolution.
Common FAQs about Unpaid Commissions
Some employers may terminate a commission-based employee just after they made a big sale. They then make the account a “house account” in order cheat the employee out of their commission. Other employees may fire a commission-based salesperson and neglect to pay them on sales they already procured.
Some employers like to change their commission plans mid-sales-stream. This means that they lower the commission their employees are entitled to after their employees have already found the customer and made the sale and maybe even after the products sold have been shipped and delivered to the customer.
Such mid-stream changes can be hard to address in legal terms as it depends on when a commission is determined to be earned. Most states have laws that say if there is an agreement in place stating when a commission is earned, it is binding. However, if there is no such agreement, it depends on the law of the state which can vary from state to state and even vary based on the type of sales.
If an employee’s contract involves commission, when and how the final commission payment is made will be outlined in their employment contract or in the existing policies or practices in the company. However, there are many employees who work with commission whose commission makes up most of their salary. In these cases, the amount of commission provided should be discussed and agreed upon in writing between the employers and employees.
This depends on a few factors. Many states do not have laws specifying if an employer has to include commissions in an employee’s the final paycheck. In the states that do, the laws state that the final paycheck must include all “earned wages.” However, this can be an ambiguous term. Some employers deem a commission earned when a sale is made while others deem it earned only when the money from the buyer arrives. For employees whose employment agreements state the latter, they may not be entitled to commissions in their final paychecks.
Some employers do not announce a change in their commission plans until a few months into a new year. This means that in those few months before the change, their employees are led to believe that the previous commission plan was in place. These employees would then later be notified that the new commission plan was in place since the start of the year and their commission rate for the sales they made in those few months is lower. This kind of retroactive change is considered a breach of contractual promise and is illegal.
Choose Carcich O'Shea, LLC for Experienced Employment Law Attorneys
At Carcich O’Shea, LLC, we have years of experience practicing employment law in New York and New Jersey. We are well-versed in the details of each state’s law and confident that we will be able to provide the best possible outcome for your specific situation.
If you have more questions about our legal expertise in unpaid commissions, feel free to contact us today. Alternatively, you may call us at 201-988-1308 or send an email to email@example.com.