Legal Question in Employment Law in California
Commissions due after termination?
I am an employed at company ABC as a sales account executive, with part of my compensation coming from commissions on sales made. A fraction of the commission is paid within one month; the rest coming many months later. I have recently closed a big deal. I am now also considering leaving ABC to work for XYZ. Am I entitled to the commissions from ABC even after I leave?
1 Answer from Attorneys
Re: Commissions due after termination?
It depends. Is there a written agreement or policy regarding commissions? If yes, get a copy of your agreement and examine it carefully for post-separation commission payment issues. If nothing is specified, regarding post-separation commissions or if there is no agreement - you need to examine how commissions are earned. Is the delay of months for payment due to a policy that commissions are earned upon payment by the customer? Does the policy cause you to forfeit commissions if the customer fails to pay timely? Generally, the employer policy can not be unconscionable - that is unfair and one-sided. Thus, if a sale is complete except for payment, and payment comes within several months after termination, the State Labor Commissioner will probably require payment of the commissions. This is handled on a case by case basis so you may want to help the clarify the facts by documenting the sale and commission entitlement with the employer's forms and make a copy for your files. A discussion with management followed by a brief memo as to the date payment is expected would be helpful as well. If you remain uncertain you can demand payment on your last day of work - either you will be paid or you will be told if and when you will be paid. At that time you can determine whether you need to proceed against the employer