Losing a job is stressful enough without wondering whether you'll be paid for the sales you already closed. Leaving your job, whether you quit or were fired, generally doesn't cancel commissions you've already earned.

Are Commissions Considered Wages in California?

Yes. California law treats earned commissions as wages, with the same protections as hourly pay or salary. That means the state's final pay rules and penalties apply to them.

What Does a California Commission Agreement Have to Include?

Since 2013, Labor Code section 2751 has required employers to put commission plans in writing. The agreement must explain how commissions are calculated and paid. Your employer must give you a signed copy and keep a signed receipt from you.

If an agreement expires and you keep working under it, its terms are generally treated as continuing until a new agreement replaces it or your employment ends.

When Is a Commission Considered "Earned"?

Usually when the conditions in your commission agreement are met. Depending on the plan, that might be when a customer signs, when the customer pays, or when the product ships. That's why the agreement is often the most important document in a dispute after a job ends.

Some plans include forfeiture clauses that say commissions are lost if you leave before a certain date. Whether a clause like that holds up depends on its wording and on whether the commission had already been earned.

When Is My Final Commission Payment Due?

Under Labor Code sections 201 and 202, earned commissions are due on the same schedule as the rest of your final wages:

• If you were fired or laid off: generally due immediately.
• If you quit with at least 72 hours' notice: generally due on your last day.
• If you quit without notice: generally due within 72 hours.

What If My Commission Can't Be Calculated Until After I Leave?

It's generally due once it can reasonably be calculated. Some commissions depend on events after your last day, such as a customer payment that hasn't arrived yet. Your employer can't use that delay as a reason to skip the payment.

What Are Waiting Time Penalties?

If an employer willfully fails to pay all final wages on time, including earned commissions, Labor Code section 203 allows waiting time penalties. These equal a day's wages for each day the payment is late, for up to 30 days. A genuine, good-faith dispute over whether money is owed can be a defense.

Do Commissions Affect My Overtime Rate?

Yes, if you're a non-exempt employee. Commissions generally have to be included in your regular rate of pay when your employer calculates overtime. If overtime was figured from base pay alone, you may have been underpaid on every overtime hour. Learn more about unpaid overtime.

What Should I Do If My Commission Wasn't Paid?

• Find your commission agreement and any later amendments.
• Gather your commission statements, sales reports, and pay stubs.
• List the deals you closed or worked on before you left, with dates.
• Keep emails or messages about your commission plan or your final pay.

Frequently Asked Questions

Can my employer keep my commissions if I quit?

Generally, no. Commissions you earned before you left are wages, and quitting doesn't erase them. Whether a particular commission was earned before your last day depends on the terms of your commission agreement.

What if I never signed a written commission agreement?

Your employer may have violated California Labor Code section 2751, which requires commission plans to be in writing. Your earned commissions are still wages, and how you were actually paid and what you were told about the plan can help show what you're owed.

Am I owed commission on deals that closed after I left?

It depends on your agreement and on what you did before you left. If you had already met the conditions for earning the commission, it may still be owed even if the deal closed or the customer paid later.

Can I file a commission claim with the California Labor Commissioner?

Yes. Unpaid commissions can be pursued through a wage claim with the Labor Commissioner's Office or through a lawsuit. An attorney can help you decide which path fits your situation, especially if the amount is large or coworkers were affected.

How long do I have to file a claim for unpaid commissions?

Many California wage claims, including unpaid commissions, generally must be brought within three years, though deadlines vary by claim and remedy. The clock may start when each commission was due, so it helps to act promptly.

JCL Law Firm, APC helps employees recover unpaid commissions and bonuses throughout California. Call (619) 848-3368 or contact us online for a free consultation. Se habla español.