I am a channel sales manager for a software company paid by a salary and commission based upon the sales of my partners. Until 6 months ago, I was being paid commision within 30 days of the sale. Then the company stopped paying commissions citing a well-hidden clause in my contract that said that commissions will not be paid until payment for the sales has been received by my company. Is this legal in California? If they discharge me from the company, do I lose all commissions not yet paid?

Thanks for any help.

I am going to suggest that you download a copy of the CA-DLSE manual and read the section on commissions. That will tell you what the CA rules on commissions are.
http://www.dir.ca.gov/dlse/Manual-Instructions.htm

Past that, ...

1. No one here has actually read your contract. It might be necessary for you to hire a local attorney to do so. While contracts cannot make the basic CA rules on commissions go away, contracts can (some times) create rules that would not otherwise exist.

2. It can be legal for an employer in CA to make the payment of the commission contingent on receipt of the payment from the customer. Not having read your contract, it cannot be said this is certainly true in your situation. I can say that all employers I have ever worked for were based on CA, some of these employers paid commissions and all of them had legal provisions that commissions were based on payments actually received from customers. This is a very common provision and can be perfectly legal if done correctly.

3. Under CA rules, it is not possible for you to lose a commission otherwise earned solely because you have terminated. This is not a "read the contract" question, because CA rules would over rule the contract in this case.

Thanks for your help!

The contract states that "Commissions on Commisionable Revenue (immediately recognizable revenue in accordance with the US GAAP revenue recognition rules) are considered to be earned upon the recognition of revenue. The Company will make the determination, in its sole discretion, of whether revenue qualifies as recognized revenue for the purposes of payment of commissions."

It is my impression that this means that when my company recognizes the revenue that I have earned the commission. Would the last sentence allow the company to change when the commission is earned and make the payment of commission contingent on payment of the sale?

The problem with contract law arguments is that the entire document needs to be reviewed by a local attorney. It is "Contracts 101" that no one ever comments on a single line of a document because the single line never has any meaning outside the context of the rest of the document.

I have given you as much of a contract law answer as I feel comfortable with.

A written contract for your commissions cannot trump the California labor code or the governing cases.

Thanks everyone for your help. It gives me a place to start.

no problem. Take care.