Failure to Pay Commissions

If you are a worker who earns commissions, you know that your wages are subject to the vagaries of the economy. When employers who are also facing difficult economic times or who are trying to cut corners fail to pay the commissions owed to you, then you should consult with an employment law attorney.

Effective January 1, 2013, all employees who work on commission must do so pursuant to a written employment agreement with their employer, as well as other provisions under California Labor Code Section 2751. Any employer who fails to have a written commission plan in place may face significant penalties.

If you are not being paid commissions that are owed to you, do not have a written commission plan with your employer or feel that your commissions or wages are not being calculated properly, contact the labor employment law firm of The Law Offices of Alex G. Tovarian.

Commissions Due to Employees on Probation and Upon Termination

Sometimes an employer will refuse to pay a salesperson who has earned commissions until a probationary period of employment has expired. This is a violation of state law. Employees who leave a company are also entitled to their unpaid commissions. California law does not explicitly provide for when commissions must be paid but the Department of Labor Standards and Enforcement does state that it must be paid within the pay period in which it is earned.

Should an employer not pay commissions or other wages owed to a terminated employee within 72 hours of his or her termination, the employer is subject to a penalty of $100 per employee and a penalty of $200 plus 25 percent of the amount unlawfully withheld for each subsequent violation.

Also, the terminated salesperson who is not paid within 72 hours of his or her termination may sue for treble damages.

Accrued or Minimum Wage to Salespersons

Those salespersons who do not work more than 50 percent in outside sales are entitled to their accrued base salary or at least minimum wage and overtime pay for all hours worked. Should the salesperson not make any sales or earn any commission, he or she is still entitled to their base salary or at least minimum wage and any overtime.

Failure to Properly Calculate Overtime

Another problem faced by salespersons is in how their overtime pay is calculated. Under California law, an employee’s base rate must be determined by taking all the employee’s wages–including hourly pay, salary, bonuses and commissions–that he or she earns in one week, and dividing it by 40 before multiplying that figure by 1.5. If your overtime was calculated without including your commissions, you may have a viable claim against your employer.

Contact The Law Offices of Alex G. Tovarian

At The Law Offices of Alex G. Tovarian, we are concerned with the interests of working men and women who are not being treated fairly by their employers and who are violating California labor laws. If you have not been paid your commissions or had your overtime calculated properly, promptly contact us. We have the knowledge and resources to properly handle a case involving the failure to pay commissions.