If my employment is terminated, is my employer still required to pay me my commissions?



If my employment is terminated, is my employer still required to pay me my commissions?

Yes, if your employment is terminated, your employer is required to pay you all earned and unpaid commissions. California labor laws state that all wages, including commissions, must be paid within a specific timeframe after they are earned.

If you are terminated or quit your job after giving at least 72 hours’ notice, your employer should pay your pending commissions immediately on your last day of employment. If you quit your job without giving notice, your employer has 72 hours to pay your final wages, including commissions.

The above requirements are based on the condition that commissions must be reasonably calculated to be paid. If a worker’s earned commissions cannot be reasonably calculated at the end of employment, they must be paid as soon as they can be reasonably calculated.

Your written commission plan or agreement sets out the terms of when your commissions are considered earned. In some cases, a commission may not have been earned at the time of termination, for example, if a customer’s payment is still pending. An employer is required to pay the pending commission to the employee once all conditions have been met. In other cases, the commission may be based on performance for a month or quarter, and the employer must pay the commission once data is available to evaluate the amount of commission owed.  

Some salespersons, including those who spend more than half their time doing inside sales, are eligible for overtime pay on all hours worked over 8 in a workday or 40 in a workweek. If you are an inside salesperson who has been misclassified as an exempt (salaried) employee, you may be owed substantial overtime pay, including additional overtime based on your commissions.

If your employer willfully fails to pay commissions or any other pay in a timely manner, you are owed your unpaid wages and commissions, plus penalties including interest and waiting time penalties of your average daily wages for each day the employer is late—up to 30 days. 

The laws surrounding commissions can be complex. If you suspect you are not being paid all the wages you are owed, discuss your situation with a knowledgeable San Francisco Bay Area employment lawyer. McCormack Law Firm can help you determine whether your rights are being violated.

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