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:

  • The number of sales made
  • The revenue/profit generated from sales

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.

Some common aspects of your commission agreement to make sure are documented:

  • Earned Conditions – 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.
  • Forfeiture Provisions – This has to do with whether or not you are obligated to receive the commissions that are earned after you have 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. 

Sales commissions agreements can be complicated. An experienced employment lawyer can help you navigate the laws to find out what you’re owed.

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