What Are Unpaid Commissions in California?

Some employees, such as those who work in sales, are paid on a commission basis. Unpaid commissions refer to a worker’s earned commissions that an employer fails to pay in full and on time. Under California law, commissions are subject to the same rules as regular pay. Workers have a right to file a wage claim to recover their unpaid commissions.

Employers are required to provide their commissioned employees with a written commission plan. Workers earn a commission when they meet specific criteria outlined in their commission agreement. In the agreement, the employer should detail how commissions are earned, such as when an employee makes a sale or signs a new client. It should also specify the amount of commissions earned and when they will be paid.

Unpaid commissions occur when your employer does not pay you the agreed-upon amount even though you fulfilled the requirements in your commission agreement. There can be various reasons for unpaid commissions, including:

Delayed payment: Your employer might have a payroll schedule that lags behind commission cycles.
Miscalculation: There could be an error in calculating your commission amount.
Disagreement: A dispute might arise between you and your employer regarding whether you met the criteria or if the commission amount is accurate.
Withholding commissions: An employer might wrongfully refuse to pay a worker their earned commissions in violation of their agreement. It is also unlawful for employers to withhold commissions from a terminated employee. An employer may not change the terms of the commission agreement after the commission has been earned.

If you believe you have not received your earned commissions, be sure first to consult your commission agreement and any company policies related to commission payouts. You can also approach your employer and have a frank discussion with them about your concerns.

If the situation remains unresolved, you can take legal action against your employer to recover unpaid commissions. Workers who file a wage claim may also receive additional penalties or damages if their employer is found liable for unpaid commissions.

Workers have a right to full and timely payment of their earned commissions. If you are struggling with unpaid commissions and your employer refuses to pay you properly, contact an experienced San Francisco employment lawyer. McCormack Law Firm can advise you on your rights and legal options. Schedule a free consultation today.

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