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Company won't pay commission Massachusetts

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  • Company won't pay commission Massachusetts

    I am asking this question for my sister-in-law. I believe I have most of the facts but I might be missing a few. Depending on what potential questions the responders ask me, I may have to go back to her and get some answers? Thank you to anyone who helps me.

    My sister-in-law recently obtained a new job. At her previous place of employment she had already earned approximately $5,000 dollars in commission. Before leaving this company she had paperwork stating the amound to be paid to her and numerous emails from her supervisor agreeing to this. Now that she has left the company they are refusing to pay her what she has already earned (commission wise).

    Can her previous employer legally refuse to pay already earned commission because she left the company?

    If they are not allowed to do this, what would her options be? Would she file a wage claim with the MA Attorney Generals Office (MA DOL)?

    If there are specific circumstances that would vary the answers (i.e. possible employment contract, hiring agreement, etc.) please let me know and I will get the answers ASAP.

    Thank you to everyone in advance.

  • #2
    The primary issue, short of an enforceable contract, is what the commission agreement defines as "earned". In other words, what has to occur before the commissions are earned? Sale, delivery, full payment, etc.

    Was she outside sales?
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


    • #3
      Thank you

      I will have to ask her those questions specifically and get back to you with the answers. If I understand her situation correctly from what she told me, all of the conditions have been met, they are just refusing to pay her because she no longer works there. I know that her company was angry that they were losing such a good employee.

      Can you define "Outside sales" as opposed to "inside sales"? I'm sure my sister-in-law knows the difference but I won't have a chance to speak to her until 6:00 pm and I would like to go back to her with as much info as possible.

      Thanks again


      • #4
        The federal rules for outside sales can be found below. "Inside" sales is arguably everything that is not legally outside sales. One key is that outside sales is exempt from the normal minimum wage and overtime rules and inside sales is (mostly) not. The flip side is it is generally much harder for an employer to not legally pay commissions to an outside sales person because that is generally their entire compensation. Inside sales (generally) is subject to MW and OT against hours worked and it is more possible (although not certain) for commissions to be legally conditional.

        Federal outside sales rules

        If the employee is inside sales for a Retail or Service establishment, then there is a different set of rules in play.

        Federal retail/service establishment rules
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)


        • #5
          Some answers

          From what DAW has posted I believe she was an inside sales person. She made salary plus commission. I don't know about her OT status but I would believe she was exempt and would not receive OT pay even if she worked over 40 hrs per week.

          I don't want to get too specific about her previous company or job for reasons constantly stated on this message board but I do know that it was not retail. She worked with clients reguarding their accounts with the company and the products the company sold. She was relatively high up in the company, not just a member of a sales team. She did have manager status.

          Not sure if any of that is relavent but I believe it answers DAW's questions.


          • #6
            If she was inside sales, she was almost certainly NOT exempt. At least not legally.
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.


            • #7
              Maybe. I have had employees who were legally paid Exempt Salaried under the Executive and Administrative exceptions who were also paid some commissions. I can include a pointer to the so-called "white collar" Exempt rules.

              Federal "white collar" Exempt rules

              Several points:
              - Commissions tend to be very agreement specific and none of us have read the agreement.
              - Worse, commissions tend to be very state law specific. The exact same agreement would not be viewed the same in different states. And MA is not my state.
              - There are several types of laws. Labor law takes a hard look at things such as minimum wage and overtime, or in the case of Exempt Salaried employees, the salary being paid. This is all pretty much black letter law. When we start talking about payments over and beyond the normal base wages, the law starts getting grayer. I am not saying that the commission is not due and I am not saying that the commission is due. I am saying based on what you have said, someone who knows MA laws on commissions needs to read the actual contracts, policies or whatever else that exists to support this claim.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)


              • #8
                Thank you both for all of your responses.

                I received some answers from her yesterday. Again, I'm sure I don't have every detail but this is what I understand. Neither at the time of hire nor during her entire time at this company was there a formal commission agreement. No contract, nothing signed. However, she was informed that on top of her salary she would make commissions when she would bring in new clients for the company. I think my information in my previous posts were incorrect. She never sold anything. She brought in clients.

                During her stay with the company they paid her commissions when she brought in clients, and there was never any problems. Now, only after she has left the company are they trying to give her problems. From what I understand, before the left the company she fulfilled her requirement to receive what is to be her last commission. She had already received the regular paper work that she always had stating the amount she was going to receive and multiple emails from her supervisor agreeing to this. Now that she no longer works there, they do not want to pay it.

                Since some of this information is getting quite confusing for me to relay on here I might try and have her come onto this site and finish with the actual details.


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