Legal Question in Business Law in California

Re: Commission plan not honored and then changed

Companies are not supposed to retroactively change plans, but can change without notice for the future. If they are having cash flow problems, you may never get paid without taking action, or at all, so look out for your best interests in deciding whether to stay or move. Make sure you understand their rules about payout related to termination, and to 'vesting' issues. Those are usually the fights, and it's too late to learn you should have stayed that extra week/month/etc once you leave. If you end up needing legal help in making your claim for unpaid monies, feel free to contact me.

Re: Commission plan not honored and then changed

I have a somewhat different view than Mr. Nelson. Your commission is part of your earnings, and must be paid as a priority item when due per the working agreement. Failure to pay earned commissions is no different than failing to pay earned wages.

Further, the commissions "vested" when earned according to the agreement in effect at the time you did the work that resulted in the commissions. The company can't strip you of earned commissions because they changed the policy afterward, nor because they are tight on funds, nor because you afterwards leave their employ. Further, this is true even if you go to work for their competitor and even if you had an agreement not to work for a competitor.

Your biggest legal worry is that the company will file for bankruptcy, not that you aren't entitled to collect. Further, as unpaid wages, your commissions would have a high priority in a bankruptcy proceeding, right behind the secured creditors and the tax collectors.

Look up the California State Industrial Relations Department in any big-city phone book, then look for a subheading for Labor Standards Enforcement. The inquire about how to enforce a claim for unpaid pay.