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Commission Due after leaving company

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  • Commission Due after leaving company

    I work for a tech company that pays commissions, not when the order is placed or when the product is shipped, but when the customer pays their bill (typically Net 30 or Net 60). At which point commissions are paid the 15th of the following month. (Orders typically ship 4-6 weeks after order is booked due to manufacturing time.)

    Two things that are disturbing about this:

    1) If I leave the company it means that I will lose approximately 2 to 3 months or more worth of commissions from orders I was responsible for producing. Is this legal? It basically means that I will be losing up to 3+ months worth of 'earned' sales commission.

    2) If the company fails to pay after 60 Days I will receive no commission at all. Is this legal?

    This is a salary plus commission position. Salary $40K plus 3-5% commission off of gross profit.

    Thank You.

  • #2
    Commissions, when in addition to a base salary, are not normally regulated by state or federal labor laws. What does the agreement/plan say?
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3

      1) As far as commissions being paid after my employment, there is no agreement. Everyone has just assumed they would not be receiving commissions after they left the company. I think I should be entitled to a pro rata commission after my employment ceases paid at the time the company receives payment from it's customers. Is that correct?

      2) On point #2 I've learned that it is not legal to withhold commissions from reps for something that is out of the control of the reps (e.g. slow paying accounts).


      • #4
        This sounds more like contract law since there probably isn't a federal or state law saying you get 4% of a sale or whatever. If there is a contract you signed that says you get a percentage of a sale, and it doesn't mention whether or not you have to be employed to get it, then you should be entitled to it. If there isn't a signed contract but it says something about the commissions in the employee handbook then you still have a contract but it isn't as easy to enforce since the contract is more "implied".


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