Attorney Jean-Claude Lapuyade

When employers fail to pay earned commissions

Different industries across San Diego structure their pay schedules in different ways, depending on the types of work their employees perform. Some may choose to pay their workers hourly wages and calculate their earnings based on the amount of time they spend doing their jobs. Others may offer their employees commissions and bonuses that can increase their earnings based on their job performance.

Whenever an employer fails to pay their employees for the work they have done, those employees should understand their rights to seek compensation. This post will address the problem of employers withholding commission payments from their employees and what can be done to remedy these occurrences. This post does not offer any legal advice and readers with commission and wage questions can contact their trusted labor and employment law attorneys.

What is a commission?

A commission is not a worker’s base or hourly pay. It is money that an employer pays to their worker for finishing a particular work duty, or meeting a production of sales goal. Commissions are often part of incentive structures that employers create to promote productivity in their workers. Not all employers use commissions in their workplaces or with their full workforce.

Who receives commissions?

Commissions are built into compensation agreements between employees and their employers. Often commissions are used in retail and service sales industries. As a worker procures more sales and buying from their employer, they receive a larger commission for their efforts.

What happens when an employer fails to pay an earned commission?

When an employer fails to pay a worker their earned commission for tasks completed or work performed, that worker may suffer. It is not uncommon for a commission-based worker to receive a low base wage for their work and to earn the bulk of their wages from commissions. The balance of base wages to commission that workers experience will vary based on their industries and contractual agreements.

The failure of an employer to pay a worker their earned commissions may be a wage violation that can be addressed under the law. Often, the first step in addressing a wage violation in California involves filing a claim with the California Department of Labor. This fact-finding process can help workers demonstrate that their claims are valid and that they have suffered losses due to the inaction of their employers.

Not all commission and wage claims are resolved at the administrative level. In some cases, an aggrieved worker may have the right to sue their employer for their missing commissions, as well as the damages that they suffered due to their employer’s non-payment. When wages and commissions go unpaid, it is always a good idea for an injured worker to speak with an attorney about their possible options.