Unpaid Commissions

[bosrep]

New here- I left my previous employer 4 months ago and I'm still waiting for final commission payment. I am owed a considerable amount but they are holding back payment until they collect all receivables. In the interim, it is apparent that costs are being applied to my orders since my departure which are reducing my payout amount. Since I no longer have control over costs applied, or receivables collected- do I have any recourse? Is there a reasonable amount of time in which I should expect payment?

I've started a new company in direct competition- I did not have a non- compete agreement, but I'm concerned they are trying to penalize me.

[CompensationCounsel]

You likely have recourse. The issue is whether you have a wage claim or a contract claim, which will make a difference in whether and how you pursue a claim. A couple of questions:

Was there a commission plan or policy? In writing or verbal? What was the pay practice?

How were commissions determined? Did you always know exactly how much you were getting and when?

Were you paid wages in addition to your commission, or were you on 100% commission? Was it otherwise a significant part of your compensation

Were all commissioned sales people treated the same?

Let's start with those.

[bosrep]

There is a written commission plan. I was 100% commission with a draw against it. I was paid after receivables were collected. They held back unpaid receivables and a portion of the cost of goods not delivered.

Commissions were a % of the gross profit per customer's annual average-

I didn't always know what I was getting since commission reports came out around the 10th to 15th and payment around the 20th and I didn't know what invoices were paid.

They had 2 plans- 1 for Major account sales people which is more of a salary/annual bonus plan.

The plan I was on as were others is straight commission with draw for the New Business Team.

The Commission plan states I am to receive 100% of commissionable dollars calculated prior to termination and 50% of commissionable dollars included in the backlog at the day of termination.

I've recieved 4 monthly commission statements since I left, each with changing commission liability and holdback percentages.

Thanks again for your assistance.

[CompensationCounsel]

The test for commissions under law to be wages is whether they are the "definitely determined" and have become "due and payable to such employee".

The courts have stated that employer's can't withold commissions from a terminated employee, in some cases, even where an employee voluntarily leaves his employer to work for a competing company in violation of a written non-compete.

All to say that you should be able to recover your commissions, if you can prove that you're not being paid according to your agreement.

If you think you have a claim, you or your attorney will need to first file a complaint with the State Attorney Generals Office, and then you or your attorney can file suit if the AG gives you leave to do so. The statute allows you to collect up to 3x the amount owed, plus all attorney's fees and costs of collection.

Best, Phil

[bosrep]

Since I worked with these people for 8 years and still consider them friends, I hope to work this out to our mutual satisfaction in short order.

If that does not happen I'll act on your advice.

Thanks for your insight-