Unpaid Commissions After Termination in California

Attorney advertisement by Edwin Aiwazian of Lawyers for Justice, PC, headquartered at 410 Arden Avenue, Glendale, CA 91203

Facing termination is challenging enough without the drama of dealing with unpaid commissions. Add battling for commissions you’ve rightfully earned and rightfully owed to the rigamarole, and navigating the legalities of collecting them can feel particularly tricky.

Knowing your rights and the legal terrain is essential if you’re grappling with your employer over unpaid commissions after termination. This article will take you through California’s laws on unpaid commissions, how to claim your due earnings, and the steps to follow if your ex-boss decides to play hardball.

When Does My Employer Have to Pay Me Unpaid Commissions After Termination?

California defines commission wages as “compensation paid to any person for services rendered in the sale of such employer’s property or services and based proportionately upon the amount or value thereof.” California law considers commissions as wages law once you’ve “earned” them, and once earned, they cannot be forfeited unless your commission contract states otherwise.

According to the California Department of Industrial Relations, if you earned commissions on or before your termination date, your employer must calculate and pay them on the termination date if you are discharged or voluntarily quit with more than 72 hours’ notice. If you quit without giving 72 hours’ notice, your employer must pay the commissions within 72 hours of terminating you.

Your employer cannot delay payment until the usual time for calculating commissions for current employees or until the next regular payday. If you have not yet earned the commission by your termination date because the commission is pending a legal condition precedent, such as the customer’s payment, your employer must pay the commission immediately once that condition is met.

How Do I Claim Unpaid Commissions After Termination?

Under California law, employers must provide a written contract for any employment that involves commission payments. This contract must outline how your employer calculates commissions and when it pays them. If you believe your employer owes you commissions following your termination, the first step is to review your commission agreement and employment contract thoroughly.

Note the conditions under which you earn commissions and when your employer pays them. Look for specific clauses regarding paying commissions after employment ends and note any forfeiture clauses. Some agreements specify that employees are not entitled to commissions for sales made after their departure, or they may detail a prorated payment based on the sales cycle.

Once you understand your commission agreement and contractual rights, here are other steps you should take to ensure payment:

• Document everything. Keep detailed records of your sales, the commission structure, communications with your employer regarding commissions, and any payments received.
• Contact your employer. Request the unpaid commissions from your former employer formally, via a written request, and include documentation to support your claim. Sometimes, a straightforward request can resolve the issue without further legal action.
• File a wage claim. If your employer fails to respond or refuses to pay the commissions it owes you, you can file a wage claim with the California Division of Labor Standards Enforcement (DLSE).
• Consider legal action. You may also initiate an unpaid commissions case and file a lawsuit against your employer. During a consultation, a skilled labor law attorney can review your claim and help determine potential actions and outcomes based on your specific facts and situation.

Understanding and asserting your rights is crucial in ensuring you receive the commission you rightfully earned. A skilled employment lawyer at Lawyers for Justice, PC can walk you through California’s complex labor laws and help you establish a game plan to collect what your employer owes you.

What Will Happen If I File a Wage Claim with the California Labor Commissioner?

Filing a wage claim with California’s DSLE is often a straightforward and cost-effective way to recover unpaid commissions. First, complete and submit the wage claim form available on the DSLE website. Provide as much detail and supporting documentation as possible. After you file it, the DSLE will investigate your claim. This investigation may include scheduling a conference between you and your employer to resolve the issue.

If the DSLE cannot resolve the problem at the meeting, it will schedule a formal hearing where you and your employer will present evidence and testimony. The hearing officer will then issue a decision. If the decision is in your favor and your employer still does not pay, the DSLE or a skilled employment law attorney can assist in collecting the judgment.

Do I Have Any Legal Recourse If My Employer Refuses to Pay My Commissions?

If your employer refuses to pay your earned commissions, your legal avenues include:

• Interest and penalties. Under California Labor Code Section 203, if an employer willfully fails to pay owed wages to a terminated employee or one who quits, the employee’s wages continue as a penalty from the date due at the same rate until paid, up to a maximum of 30 days. This includes unpaid commissions.
• Attorney’s fees. If you file a lawsuit and win, the court may order your employer to pay your attorney’s fees and costs. This can significantly reduce the financial burden of pursuing legal action.
• Private Attorney General Act (PAGA). The PAGA allows employees to sue their employers on behalf of themselves and other employees for Labor Code violations, including claims for unpaid commissions. PAGA enables employees to recover civil penalties the state would otherwise collect.

A seasoned advocate at Lawyers For Justice, PC, during a consultation, can explain these avenues and other options. Contact us today, and let us help you collect the commission you’re entitled to.

Lawyers for Justice, PC Will Defend Your Workplace Rights

If you’re dealing with unpaid commissions after termination, the experienced employment lawyers at Lawyers for Justice, PC, are here to help. We offer free case evaluations and comprehensive legal advice tailored to your situation.

With a proven track record of recovering over $100 million for California employees, our commitment to advocating for justice is unwavering. Contact us today—we thoroughly understand employment law and California commission laws and will relentlessly protect your workplace rights.