If you were terminated from your job but you are owed commission payments, what are your rights? And what are the employer’s rights? There are specific requirements for receiving your last paycheck following termination, but are commission payments included in that check? Read on for more information about commission payments and the variables that may affect how, or if, they’re paid out following employment termination.
Commission payments usually follow a certain schedule. For example, if you sell 50 widgets to Company A, you will likely provide a time frame within which Company A has to pay for their widgets. Maybe it’s 15 days, maybe 30, maybe 60. Payment is rarely received when the sale is negotiated. Let’s say Company A has 30 days to pay for their widgets, but they find cheaper widgets somewhere else and cancel their order with you. If you had already received a commission payment on those widgets, this could present a serious problem. For this reason, commissions are rarely paid to employees until full payment has been received.
Factors Affecting Commission Payments
Whether or not you are owed a commission payment after termination is dependent on several factors. These include:
- Terms within your contract
- Your level of involvement in generating the sale
- Circumstances of the sale and your termination
Unless there is an agreement to the contrary, if the commission was earned prior to the date of the termination, the employer will likely be obligated to pay. If, however, the commission was not earned by the date of the termination, but the sales process has been initiated, the policy will be dictated by past practices. It is important to keep in mind, however, that the waters can get a bit muddy if the employee was fired for cause. That doesn’t mean that no commissions can be paid…it just makes things more complicated.
If compensation is entirely or partially commission based, there should exist a clear commission schedule between the employee and employer. This payment schedule should include information about when commissions are paid on a closed sale, the impact of renegotiated or canceled sales, and guidelines for handling commission payments following termination. By reviewing this contract, a MA employment law attorney can help you determine if, how much, and when commissions should be paid. If you are still employed and you do not have a contract with clear commission policies, you should request one to avoid serious headaches in the future.
If you have exchanged emails with your supervisor, human resources, or anyone within your company prior to your termination, save these emails. Just as they say “one man’s trash is another man’s treasure,” what seems to you like an insignificant email could be a gold mine. Don’t delete. A Boston employment law attorney can help you determine how to proceed if you’re owed commission payments following a termination. Continue reading