I earned sales commissions – Why will my employer not pay?
Many companies offer incentives to sales representatives in the form of commissions. If you are a hard-working sales representative whose paycheck does not reflect your statistics, you may wonder if your employer is taking advantage of you.
As a commissioned employee, you should have a written contract that outlines the conditions of your payment.
Is there a clear compensation plan?
When you accept a sales position, it is important to understand the company’s payment structure. There are four types of commission programs:
- Straight commission plan: you earn no base salary and rely only on sales commissions
- Gross commission plan: your employer pays a set percentage of your monthly sales
- Tiered commission plan: you earn more for larger sales
- Multiplier commission plan: you earn more for selling additional product lines
If there is no employment agreement or its terms are ambiguous, you will need proof of communication between you and your employer that supports your understanding of your earned wages.
When does your employer pay commissions?
Legal requirements for sales commissions vary, but company policies and payment terms should also reflect in your employment contract. If your employer terminates your contract before a payout, they may try to claim that you are not eligible to receive the money based on your dates of employment.
If your employer breaches your written employment contract by refusing to pay your sales commissions or bonuses, the company may be liable for those wages plus penalties. It is important to secure and maintain detailed agreements in order to protect your rights in the event of a dispute.