California law prohibits employees from forfeiting earned commissions. If the work for which the commission is complete, and the employer has been paid, the employee must be paid the commission. The payment cannot be forfeited because the employee is on a leave of absence once payment is complete. Reasonable deductions to the extent somebody else had to service the deal after the employee left may be permitted if work and labor on the deal remains. However, complete forfeiture is against California’s public policy. Contract terms attempting to create situations of forfeiture are not conscionable and will not be honored if actual labor, service, and efforts were performed in order to earn the commission. Moreover, employers cannot be unjustly enriched by receiving the benefit of the employee’s labor and then claim commission forfeiture.
REACH OUT TO A TOP EMPLOYEE LAW FIRM BY CALLING 877-525-0700 AND START YOUR CASE FOR FORFEITED COMMISSIONS
During the Covid-19 epidemic many employees have been, or are, put on leaves of absence until the economy in their city and/or county moves onto a different phase allowing reopening. If the sale is complete before the employee is furloughed the employee is owed all or part of their commission depending on whether work remains to be done on the sale. The same is true should an employee go out on a leave of absence under the Family Medical Leave Act [ link], Disability [link] or Pregnancy [link]. Amongst other thing it would be discriminatory for an employer to deprive employees of earned commissions if they are forced to go on a legally recognized leave of absence for 12 weeks, longer if they have a disability, or pregnancy.
Lawsuits should be brought if an employer decides not to pay on a commission. Besides normal breaches of commission agreements, situations exist when the employer has a contract depriving the employee of an earned commission just because the employee is not physically on the work premises a few days later even though the revenue has been collected. For instance, a car dealership might have an incentive pay program based upon selling a particular brand, or vehicle related items. California car dealerships shut down by law or due to temporary layoffs in March. Employees were not physically able to be working on the premises by the pay day where the commission would normally be paid. If the employee did all of the work associated with the sale and the money was booked if not collected before the employee went on leave it is illegal to deprive that employee of commissions.
CALL 877-525-0700 AND SUE FOR NOT BEING PAID A SALES COMMISSION WHEN YOU DID ALL THE WORK ON THE SALE
As of the writing of this announcement, there have been reports Wells Fargo decided not to pay earned commissions to employees who were furloughed. There are also reports GM decided not to pay car salespeople incentive commissions if they were furloughed. Class actions are being brought on these issues. Contact our law firm immediately to find out what your rights are.
Earned commissions are earned commissions. Employers cannot claim a fully earned commission is forfeited because the business was forced to be closed due to Covid-19. It is unfortunate that some employers are using their forced, temporary shutdowns as an excuse to see if they can get the employee to agree their commissions are forfeited. Wage lawyers will promptly sue for unpaid commissions. The Labor Board is ineffective and takes too long.
Commissions are considered earned if:
If a sale is made in March for the summer season, and a mere deposit has been taken the employee should still be paid their commission if the product is duly paid for in June and there is not substantial work to be done in order to consummate the sale arrangement after the employee made the sale. The law looks at how much has to be done after the sale has been made and when the funds are received for the sale. California law disfavors commission forfeitures because a small amount of work has to be done months later, or the employee is not physically present when a sum paid to a third-party when the employee is still employed is ultimately paid to the employer. Experienced employee commission lawyers are available at 877-525-0700. The best thing to do is to call and find out if the law firm can take your case for unpaid commissions. While not a guaranty nor prediction of your case, firm founder, Karl Gerber has obtained more than $1,000,000 in settlement for employees whose employers claim they forfeited their commissions.
CALL 877-525-0700 AND TELL YOUR COWORKES YOU FOUND A WAGE RECOVERY ATTORNEY TO GET WHAT YOU DESERVE!