Los Angeles Unpaid Commissions & Bonuses Attorneys

Common Tactics Employers Use to Deny or Withhold Earned Bonuses & Commissions

Employers often rely on a variety of strategies to avoid paying bonuses and commissions that are contractually owed to employees. However, if you substantially completed the work required to earn that money, the law is often on your side, and we can help enforce your rights.

We encourage you to seek legal guidance if your employer is using any of the following excuses to deny or withhold earned commissions or bonuses: 

• The "discretionary" label. Employers frequently claim that a bonus relies entirely on their goodwill rather than your performance. However, if your offer letter or compensation plan ties the payment to specific production metrics or quotas, California law typically views it as earned wages.
• Employment-at-time-of-payment clauses. Companies often try to refuse payment because an employee resigned or faced termination before the arbitrary payout date. If you substantially completed the work required to earn the commission, your employer generally cannot cause you to forfeit those earnings simply because you are no longer on the payroll.
• Retroactive plan changes. Management might alter the commission structure after you close a deal, but before they cut the check. They may attempt to apply new, less favorable terms to work you already finished to reduce their financial obligation.
• Prevention of performance. An employer may wrongfully terminate a salesperson just before a large commission vests or a quarterly bonus becomes due. If this type of scenario describes your situation, we can investigate whether your employer terminated you specifically to prevent you from collecting the large sum you earned.
• Vague “net profit” deductions. Companies sometimes deduct ambiguous overhead costs, marketing fees, or "administrative expenses" from the revenue you generated. They use this "creative accounting" to artificially shrink the profit margin on which they base your commission.
• The "client hasn't paid" defense. Employers often delay your commission by stating they have not yet collected from the customer. Unless your written agreement explicitly states you only earn commission upon the company's receipt of payment (rather than upon the booking of the sale), they may owe you the money immediately.