Commissions due after termination
Q: I was recently laid off from my sales job that paid me a salary plus commission. I was laid off toward the end of the month. The company does not want to pay me for sales that I made in the month I was laid off. The company would pay commissions the month following the month the sales were made. Should I still be paid for the sales I made in the month I was laid off?
A: I am sorry that you were laid off and now have concerns about final compensation that may be owed to you. There are some questions that need to be answered before I am able to give you a complete and accurate response.
In short:
- did you complete all the work-related activities to complete the sale?
- does your commission plan outline what activities are required to close/complete
a sale?
If you completed all the work activities required, your employer should pay you the commissions that were earned in that prior month.
I consulted employment attorney Jack K. Merrill of Mayer, Antonellis, Jachowicz & Galvani, LLP to provide additional information. Merrill explains:
"The Massachusetts Wage Act requires employers to pay their workers all money they earn within narrowly defined parameters. This includes weekly salaries, hourly wages, vacation pay that’s accrued but unused at job termination, and commissions, which must be paid in full when they become calculable and due. The fact that a worker leaves the job – regardless of the reason – does not impact an employer’s obligations under the Wage Act. When an employee is fired, he/she must be paid all money due on the date of termination. Businesses that fail to do so face mandatory triple damage awards, and the legal fees incurred by workers in collecting wrongfully withheld wages must be repaid."
If you have a written commission plan, it may be helpful to review that document. If you satisfied all the work requirements as specified under your written commission plan, you are likely due the commissions earned.
Merrill also offers, “Your employer cannot hold up a wage deferral arrangement (such as a policy of paying commissions the month after they are earned) as a defense to a valid Wage Act claim.”
You may want to send this information to your former employer after you have reviewed your commission plan. They may respond appropriately and pay you monies that are owed to you. If you still do not receive this compensation, you can certainly review the circumstances of your case with an employment attorney and determine whether your former company transgressed the law’s tough, employee-friendly provisions.
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Meet the Jobs Docs
Patricia Hunt Sinacole is president of First Beacon Group LLC, a human resources consulting firm in Hopkinton. Sheworks with clients across many industries including technology, biotech and medical devices, financial services, and healthcare, and has over 20 years of human resources experience.
Elaine Varelas is managing partner at Keystone Partners, a career management firm in Boston and serves on the board of Career Partners International.
Cindy Atoji Keene is a freelance journalist with more than 25 years experience. E-mail her directly here.
Peter Post is the author of "The Etiquette Advantage in Business." Email questions about business etiquette to him directly here.
What about an employer changing the term of commission payments after an order is written and before it closes? Our orders typically take 3 to 4 months to close and we are having company wide salary reductions - commission based staff are getting a reduction in their rate for all orders closing after 11/1. Hourly staff are getting a reduction in hourly rate. Commission staff are earning a reduced commission rate. Can this reduced rate be applied to orders written and not yet closed? Many of these orders have not been completed, although some may be. Thank you.
Another ? - what if you are paid commissions after collections? Is the employer responsible to pay the commission if the customer has not paid yet - in the business I worked at it sometimes takes 60-90+ days to get collected funds on services recieved? should I have been paid commission the day I was let go on those too?
This blogger might want to review your comment before posting it.