Legal Question in Business Law in California

commissions due

I was laid off today and was told

they would not pay my commissions

oncontracts that were completed

but not paid for yet. I was told that

those commisions would now be

paid to someonelse. They told me

company policy was that

commissions were paid to me the

first month I worked. Is such a

policy legal.


Asked on 3/03/09, 3:52 am

3 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

Re: commissions due

Legal? Sure. The employer determines policies.

Now, you could file a claim with the Labor Commissioner and try to show you are entitled to the commissions under their policies and practices. You have nothing to lose by doing so.

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Answered on 3/03/09, 2:47 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: commissions due

A company is free to pay commissions according to a policy of its own authorship, including a policy that says the commission goes to the incumbent at the time the customer pays the invoice. However, the company's commission policy must be made known to the salespeople and cannot be changed retroactively once the salesperson has done work that may result in the commission. In other words, the company cannot manipulate its policy to do a commissiondectomy on the salesperson. I can't tell for sure what's going on here; if you received the policy in writing, review it to make sure it's now being followed. You are entitled to notice of a downgrading in policy before you do the work, not later on. Once you've set up a possible commission by your efforts, it should be yours if existing policy says so, and a change after you've done the sale is an unfair practice.

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Answered on 3/03/09, 11:20 am
Adam Telanoff Telanoff & Telanoff

Re: commissions due

If you have a written contract it should specify when commissions are earned and when they are paid.

If there is no written contract, is there a written policy anywhere?

If there is no written policy what has been the custom and practice of this employer?

The real question is when commissions are earned, on closing of the sale or on payment of the invoice.

There is no hard and fast rule about this.

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Answered on 3/03/09, 11:55 am


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