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Unpaid Commissions

Commissions plans are a type of compensation plan that is used to incentivize employees in sales-related positions. A commission plan typically looks like this – the more sales, the higher the commission.  

Most importantly, commissions are wages. When an employer offers a commission plan, it must pay the employee what they’ve earned.  To know when commissions are "earned," employees should look to the commission agreement -  Employees should ALWAYS insist on a written commission agreement. 

As for paying an employee’s commission wages, employers are required to make commission payments within a very specific timeframe:

  • For commissions earned between the 1st - 15th of the month, the employer must pay no later than the 26th of that month; and,

  • For commissions earned between the 16th and the last day of the month, the employer must pay no later than the 10th of the following month.

 

Since commissions are wages, when an employer fails to properly pay earned commission, the employee may be able to collect various unpaid wage penalties in addition to their unpaid commission wages.

Are You Owed Commission Wages?

California Minimum Wage Requirements

2020 

  • $12 / hr (25 or fewer employees)

  • $13 / hr (26 or more employees)

 

2019 

  • $11 / hr (25 or fewer employees)

  • $12 / hr (26 or more employees)

2018

  • $10.50 / hr (25 or fewer employees)

  • $11 / hr (26 or more employees)     

 

2017 

  • $10 / hr (25 or fewer employees)     

  • $10.50 / hr (26 or more employees)

Like all wage issues, your employer cannot withhold your earned commission wages.  When they do, you have several different options on how to proceed. You could: 

  • Ask for your earned commissions to be paid;

  • File a claim with the Labor Commissioner seeking any unpaid commission wages; or

  • Hire an attorney to obtain your commission wages and any available penalties on your behalf.

Regardless of how you proceed, you have a right to your unpaid commission wages!

 

What are Unpaid Commissions?

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© 2020 by Lansdown Law - California Employment Lawyers. All rights reserved.