What are the laws on unpaid or late-paid commission? Unpaid or late-paid commissions can be upsetting and discouraging. It doesn’t really seem fair to work hard to make a sale but never reap the benefits. It can also make life difficult if you know you should be receiving more wages, but they never come, or they come too late. Having a reliable, steady paycheck is important, especially in California where the cost of living is so high. California has very specific laws regarding commission, how it is defined, how and when it should be paid, and much more. If you are an employee working on commission, it’s important to know your rights so that you can combat illegal activity from your employer. Unpaid or late-paid commissions are a very common type of wage claim. If you think you have fallen victim to this, get in touch with one of our skilled unpaid or late-paid commission lawyers here at California Labor Law Employment Attorneys Group today.

What is commission?

Commission is a type of compensation that is related to a percentage of a sale made of a product or service. In California, commission is considered a kind of wage and must adhere to all the laws of wages earned. According to California Labor Code, all wages must be paid twice each month. Wages earned between the 1st and the 15th of the month must be paid by the 26th, and wages earned between the 16th and the end of the month must be paid by the 10th of the following month. Commission is not discretionary, meaning employers cannot withhold it from you. California requires employers to provide a commission agreement to any commission employees that contains information on how commission is calculate, when it is paid, and what constitutes a commission to be earned. The employee must sign a receipt and give it to their employer to show that they have received a copy of the agreement. Commission is compensation that is directly related to either the amount of goods or services sold, or the value of the goods or services sold.

There are several different ways in which a commission may calculated. Here are some examples:

  • Price percentage- based on a percentage of the price of the product sold
  • Profit percentage- based on a percentage of the profit made from the product sold
  • Fixed amount per sale- a flat-rate for a certain number of products sold
  • Fixed-floor- a minimum payment for a sale or a percentage, whichever is higher
  • Mixed agreement- varying percentages

It does not necessarily matter what way the commission is calculated, as long as it is specified in the agreement.

When do I receive my commission after leaving a job?

California law says that if you have given your employer at least 72 hours of notice of leaving your job, then you should be paid immediately when your job ends. If you fail to give at least 72 hours of notice, your employer has 72 hours to give you your last paycheck. When it comes to commission this can be slightly tricky if your employer is unable to reasonably calculate what your earnings are. In this situation you may not receive you commission compensation at the same time.

Can I be forced to work overtime?

There are some instances when an employee may face a forfeiture provision. This is when the agreement specifies that in order to receive commission compensation, you must be an employee. Upon termination, an employee may be forfeiting their right to compensation. At times, the laws surrounding forfeiture provisions are hazy. While unfair for the employee, it has been proven unfortunately, that most of the time courts have ruled in favor of the employer. It usually depends on how implicit or explicit the commission agreement is on certain contingencies for receiving the commission.

Is it illegal to be paid my commission late?

Like it was stated earlier, commission compensation must be treated like wages earned and must be paid out at least twice each month on a pre-determined payday. Once a commission has been calculated and can qualify as earned, it must be paid by the first payday proceeding this. All the necessary information to calculate a commission must be received before a commission is considered earned.

There are penalties for wages, including commissions, that are not paid at their appropriate time after job termination. If the termination is willful and commission is late to be paid, the employer will have to continue to pay the employee wages as if they were still employed from the date the paycheck was due up to 30 days or until the payment is made, whichever comes first. If your employer has failed to pay you on time, then you may want to file a wage claim. Our attorney can help you with this.

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It is not fair if you have put in the work to earn commission and your employer withholds these earnings from you. Your employer may be withholding not only your earnings but maybe gas for the week or groceries and dinner for the night. Our earnings are very important to sustain our way of life. Unlawful employers should be punished for their crimes. If you have not received commission that is rightfully yours, you can schedule a free consultation with one of our unpaid commission attorneys. At your free consultation you will be able to gain free legal advice from an experience attorney who knows all about employment and labor laws. Choosing who to represent you in an unpaid commission lawsuit is important because this may determine how the amount you will receive in recoveries. If you are already working with a lawyer, we encourage you to get in contact with us to get a free second opinion from one of our attorneys. Our lawyers want you to gain the most compensation possible from your lawsuit. When our lawyers represent you, you will not be required to pay any out-of-pocket expenses. Our zero fee guarantee promises there are no upfront fees and only a small contingency fee if we win your case. Possible outcomes for unpaid wage lawsuits are recovery for all your unpaid wages for hours worked, recovery for any unpaid overtime, punitive damages, attorney’s fees and court fee expenses. Get started on a lawsuit against your employer today by reaching out to one of our lawyers today!