Commission owed @ termination

If an ER has a commission policy that an EE has to be employed in order to receive earned commissions, can the ER abide to this policy by not paying the termed EE commissions or has to follow the law by paying all wages earned, including commissions?  I'm referring to CA law.


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  • In CA, commissions are considered wages, and commissions owed must be paid to the employee even after the employee is no longer working for the company. So a company policy of not paying commissions owed after termination would be a violation of the law. 

     Payment may be delayed until there is receipt of a customerss payment on the sale and commissions can be calculated.

  • The way I look at this is if the employee did all of the work to bring in the sale and earn the commission before termination, he should be paid the commission. If the employee earned it and you don't pay it you could find yourself with a wage claim.

  • How would I find out what the law is in Arizona on this subject (or does anyone know)?

  • Hi Dawn:

    In Arizona discharged employees must be paid within 3 working days or at the end of the next pay period, whichever is sooner (AZ Rev. Stat. Sec. 23-353). Employees who leave voluntarily must be paid no later than the next regular payday. Wages to be paid include sick pay, vacation pay, severance pay, commissions, bonuses, and other amounts promised under an employer's policy or practice of making such payments (AZ Rev. Stat. Sec. 23-350). Hope this helps!

  • We had an employee who has NO carried over vacation from last year (2006) and he has gone for vacation for 2 weeks this month. My boss is very nice and he has allowed him to take his two week vacation even though fully accrued two week vacation is earned until by end of the year.

    I understand that vacation is based on the agreement between the employer and employee, is there any good material that you can sugest to implement to the company policy without crating a big issue over this among the employees in the company? please advice. thanks









  • Your company could run into problems because if you grant the vacation to one employee who hasn't accrued it, you have to grant it to all employees who haven't accrued it. You have to make sure managers follow your policy on vacations. It's a delicate issue because your boss is the one who granted the vacation, but noting the potential liability issues of going outside of company policy (which could lead to dicrimination claims) might be enough to get him/her in line.
  • Can you give the reference where commissions are considered wages under CA state law?  In addition, would an employment agreement specifying a reduced commission is paid to terminated EE that an ER & EE has signed override this clause if the EE is being paid a salary as well as a commission?

  • Information on commissions as wages can be found at the following location: A contract between the employer and employee may provide otherwise as indicated in the DLSE guidance document.


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