Legal Question in Employment Law in California

Re: Forced forfeiture of earned commission due to termination,resignation or tra

Employers can require as a condition of payment of a commission or bonus that the employee be employed at the time of payment. These incentive benefits are not required to be paid in the first place, as they are in addition to your salary, so they can place conditions on the payment of them as long as you are notified in advance.

Re: Forced forfeiture of earned commission due to termination,resignation or tra

Simple answer is yes. You can agree to it in advance. However, I might look at it all much closer if the employee is terminated and the timing is intended by the employer specifically to avoid payment of the commission. May be difficult to put it all together, however, I have litigated such matters successfully. Results based on evidence that can be presented.

Re: Forced forfeiture of earned commission due to termination,resignation or tra

Courts generally do not like to see a forfeiture. The manner and process of negotiation of the agreement as well as the overall fairness of the deal among other factors will be examined to determine whether the agreement is both procedurally and substantively fair. For example, was the agreement negotiated or was it a form agreement without any negotiation. Further, did the sales person do everything needed to complete the sale or did another person complete the job to finalize the sale transaction? Did that other person get the commission or was the company enriched by not paying it to anybody? Depending on the facts, under California law, all or part of the commission may be due. A full review of the relevant documents should determine your rights and options.