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How does commission after termination work?

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  • How does commission after termination work?

    In TX, if you quit work but are owed commission, are there any circumstances where you can be paid what commission you are owed? I never signed a contract at my company, only an acknowledgement that I read a handbook. The handbook states that you can only earn commission upon leaving the company if the client has paid for their product BY your termination date AND the warranty period has expired (120 days). That never happens. We generally get paid by 120 days post-sale, unless it's from a client that intends to not pay at all (hence, why it's stated in the handbook as so). Even still, I was told by a lawyer that a handbook is not a contract, and that if no contract is signed stating that I would forfeit my commission sales upon resignation, then I *could* be entitled to receiving my commission funds. Can anyone expand on this? Thanks.
    Last edited by trickle; 01-17-2006, 06:34 PM.

  • #2
    Texas Commission

    Commissions in Texas are considered wages, according to Sec. 61.001(7) of the Texas Payday Law. Sec. 61.014 says they are payable according to the terms of:
    (1) an agreement between the employee and the employer; or
    (2) an applicable collective bargaining agreement.

    That is the extent of the law.

    Going a little further, the Texas Payday Rules, which is the position adopted by the Texas Workforce Commission, talks about when commissions are earned, the required notice to change the agreement (oral or written), and also about the payment of commissions after separation. They are payable based on the routine or practice specified in the agreement when the employee was employed, or on any special agreement. Check out:
    http://info.sos.state.tx.us/pls/pub/readtac$ext.TacPage?sl=R&app=9&p_dir=&p_rloc=&p_tl oc=&p_ploc=&pg=1&p_tac=&ti=40&pt=20&ch=821&rl=26.

    If an attorney is convinced that you can get this, maybe they'd take it on a small percentage. If you think the commissions are due under this rule, the TWC will take a wage claim for up to 6 months from the due date of the commissions.

    Comment


    • #3
      the "due" dates are not ever specified. my funds are only paid to me one month after the client pays. i suppose if the client hasn't paid for the products, then i wouldn't be entitled to receiving the money anyway, right?

      Comment


      • #4
        Entitlement

        You'd be entitled to whatever is required by your agreement, policy, or routine when you were an employee. I can't answer your specific question, since I don't know what that agreement, policy, or routine is. TWC can, after an investigation, or likely, you can, now.

        Comment


        • #5
          It doesn'y hurt to take them to the labor board and request unpaid wages. I know I have been through this exact situation, were the employer decided they were going to go ahead and keep my "earned" commissions. And here in California the labor board said thatb was a big NO NO.... the could not keep my commissions "for their own enrichment".

          I think that they owe you your commissions that you "earned" but they might not be payable until a certain time frame. They cannot just keep your "earned" commissions for their profit. Either way the labor board is here for this very reason, they are easy to work with and its not a lot of hassle.

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          • #6
            California is a very different animal. A lot of what flies in California would never get off the ground in almost any other state.
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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            • #7
              Originally posted by Texas709
              You'd be entitled to whatever is required by your agreement, policy, or routine when you were an employee. I can't answer your specific question, since I don't know what that agreement, policy, or routine is. TWC can, after an investigation, or likely, you can, now.
              Well, the client must first pay for the product, and then one month after that, I can get the commission. Our clients take several months to pay us. I know some of my clients might pay by my termination date, hypothetically, but that isn't a month after they pay. So would I be entitled to that money even though if I were working there I would have to wait a month until I got that commission?

              Comment


              • #8
                You're still asking the wrong people...

                Trickle,

                I don't decide wage claims for TWC, and I can't give legal advice. If you think you are entitled to the unpaid amounts as wages, based on the law, you should file a claim with TWC. They can make a degal determination, by applying the law to the employer's written policy.

                http://www.texasworkforce.org/ui/lablaw/lablaw.html offers detailed information about the Texas Payday Law, and there is a downloadable claim form at http://www.twc.state.tx.us/ui/lablaw/ll1.pdf.

                Comment


                • #9
                  I have another question: suppose you put in your 2-week notice exactly 2 weeks from the day you would get paid both your paycheck and your bonus (commission) check next. regardless of company policy, is the company legally bound to pay you both paychecks even if on the day you put in the 2-week notice you don't return to work?

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                  • #10
                    Again...

                    Employers are obligated to pay regular wages on payday, and final wages on the next regularly scheduled payday after a resignation.

                    Employers are obiligated to pay commissions in accordance with the agreement or practice in place.

                    Specific, "what if" questions should be addressed to the TWC in the form of a claim for unpaid wages, if you feel you have not been paid in accordance with the law. Any other answer to your scenario is speculation, and worth precisely what you paid for it.

                    Comment


                    • #11
                      Labor Laws

                      Originally posted by trickle
                      In TX, if you quit work but are owed commission, are there any circumstances where you can be paid what commission you are owed? I never signed a contract at my company, only an acknowledgement that I read a handbook. The handbook states that you can only earn commission upon leaving the company if the client has paid for their product BY your termination date AND the warranty period has expired (120 days). That never happens. We generally get paid by 120 days post-sale, unless it's from a client that intends to not pay at all (hence, why it's stated in the handbook as so). Even still, I was told by a lawyer that a handbook is not a contract, and that if no contract is signed stating that I would forfeit my commission sales upon resignation, then I *could* be entitled to receiving my commission funds. Can anyone expand on this? Thanks.
                      I live in california and I have a similar problem, I was let go from my job and I had certain sales/commisions taken from me. In cal. our labor code ( lab200-243) states that if you are providing a service for your employer than they are to pay you what is titled to you, I am trying file complant with the state so this can go on some sort of record. Take a look at your state labor law codes under commission regulations, its usually the first one on the list. Good luck my friend.

                      Comment


                      • #12
                        Marcel, California laws are VERY different from Texas laws. Texas709 gave the original poster good advice and the OP apparently thought so too, because he hasn't posted back.
                        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

                        Comment

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