If you’re an employee that is paid by commissions and you believe your employer isn’t honoring your sales commission agreement, our experienced employment lawyers can help you better understand California commission pay guidelines so you can get paid what you’ve earned.
What are Unpaid Sales Commissions?
According to the Department of Labor, a sales commission is a sum of money paid to an employee upon completion of a task, usually selling a certain amount of goods or services. Employers sometimes use sales commissions as either an incentive to increase worker productivity or as a primary method of payment for sales-based positions.
Sales commissions are generally based on one of the following:
- Percentage of the Sale Price. When the sales commission is based on a percentage of the price of the product or service being sold.
- Percentage of Profit on the Sale. When the sales commission is based on a percentage of the amount of profit generated from the product or service being sold.
- Fixed Amount Per Sale. When the sales commission is based on a fixed amount for each product or service sold.
- Mixed Amounts. This is when the commission is based on more than 1 factor and could be a hybrid of the other methods.
It’s important that your commission pay structure is in writing, as there are many nuances that may affect how and when you’re paid, which could make a difference in your unpaid commissions case.
What Commission Pay Guidelines SHould Be Documented?
Commission pay can be an important part of your income, therefore California commission laws state that your commission pay structure needs to be properly documented.
California Commission Pay Guidelines
The sales commission contract shall be in writing and shall set forth the method by which the commissions shall be computed and paid.
Defining "earned" commissions
This has to do with the criteria in which the commission is said to be earned. Some agreements may state that the commission is earned when the sale is made, while other agreements may state that the commission is earned when the sale has been paid for by the customer.
California Law on Commission Pay
“Wages” includes all amounts for labor performed by employees of every description, whether the amount is fixed or ascertained by the standard of time, task, piece, commission basis, or other method of calculation.
Payment of sales commissions after termination
These are part of forfeiture provisions that state whether or not you are obligated to receive the commissions that are earned after you left the job. This usually comes into play when your commission is based on the customer paying, and there is a gap between making the sale and the customer making the payment.
California Law on Commission Pay After Termination
If an employer discharges an employee, the wages earned and unpaid at the time of discharge are due and payable immediately.
Payment of sales commissions after resignation
This is another forfeiture provision similar to the payment of sales commissions after termination. Many sales commissions agreements do not distinguish between the reason for separation.
California Law on Commission Pay After Resignation
If an employee not having a written contract for a definite period quits his or her employment, his or her wages shall become due and payable not later than 72 hours thereafter, unless the employee has given 72 hours previous notice of his or her intention to quit, in which case the employee is entitled to his or her wages at the time of quitting.
Talk to an Employment Lawyer With Experience IN Commission Pay Guidelines
Not all attorneys are created equal. Do you want someone that aggressively fights for you, that chases every last nickel your employer stole from you and who does not give discounts? To have the best opportunity for success, you should hire an attorney experienced in California commission law cases.
These cases require experience and skill. Going up against your employer can feel daunting, but not if you have the help of a knowledgeable attorney by your side. Let us help.
Our California commission pay guidelines lawyers are experienced in handling these types of cases.
Drew Lewis, PC, led by its lead trial attorney Drew Lewis, has years of experience representing employees who have had unpaid commissions.
Drew has recovered millions of dollars for his clients. He understands how employers try to hide the facts and how to prove California commission law cases. And he does not give discounts to employers who have stolen from their workers.
We offer a free case evaluation. And you do not pay us unless we win your case.