Habla Español
Call Us Today (949) 379-6250
Whether you’re in sales, real estate, marketing, or another field, earning commissions is a critical part of your livelihood. Unfortunately, disputes over unpaid commissions are not uncommon. Employers may withhold earned commissions, delay payment, or dispute the terms under which commissions were to be paid. If you find yourself in this situation, a Los Angeles Commission Pay Lawyer can help you recover what you are rightfully owed.
A commission pay dispute occurs when there is a disagreement between an employee and employer regarding the payment of commissions. Commissions are typically paid as a percentage of sales or transactions an employee completes. Common causes of commission pay disputes include:
Unclear or Vague Commission Agreements
If the terms of the commission agreement are not clearly spelled out in writing, misunderstandings can easily occur. Issues can arise regarding when commissions are earned, how they are calculated, or whether certain transactions qualify for commissions.
Nonpayment or Withholding of Commissions
Sometimes, employers delay or fail to pay commissions that are earned and due. Employers may argue that the employee did not meet specific conditions or quotas necessary for receiving the commission, or they may attempt to withhold commissions as a penalty for other issues, such as poor performance or leaving the company.
Changes to Commission Structures
Employers may change the commission structure, often without clear notice to the employee. These changes can reduce an employee’s expected earnings, leading to disputes over commissions owed under the previous terms.
Disputes Over When a Commission is Earned
Some disputes arise when an employer claims that a commission is not earned until a certain event occurs, such as the final payment by the customer, while the employee believes the commission is earned at the time of the sale or contract signing.
In California, employees are protected by several labor laws that govern the payment of commissions. If your employer unfairly withholds or fails to pay commissions, you have legal options. Here are some potential claims you can file:
Breach of Contract
In many cases, commission disputes arise from a breach of contract. If there is a written agreement (or even an implied contract based on past practices) outlining the terms of your commission pay, and your employer violates those terms, you may have grounds for a breach of contract claim. To prove breach of contract, you need to show that:
Having a clear, written agreement can significantly strengthen your case.
Violation of California Labor Code
California Labor Code Section 204 mandates that wages, including commissions, be paid on time and in accordance with the terms of employment. If an employer delays or withholds commission payments, they may be violating this provision.
Additionally, California Labor Code Section 2751 requires that all commission agreements must be in writing. If your employer does not provide a written commission agreement, they are in violation of the law.
Unfair Business Practices
In some situations, withholding commissions can be seen as part of a broader pattern of unfair or deceptive business practices. Under California’s Business and Professions Code Section 17200, also known as the Unfair Competition Law (UCL), employees can sue employers for engaging in unfair business practices, which includes withholding commissions. This law is especially useful when multiple employees are affected by the same unfair practices, as it allows for collective legal action.
Unjust Enrichment
Unjust enrichment is a legal claim that can be made when an employer unfairly benefits at the employee’s expense by keeping commissions that rightfully belong to the employee. In these cases, the employee argues that it is unjust for the employer to retain the benefit (commissions) without paying the employee for their work. While unjust enrichment is not always the strongest standalone claim, it can supplement other legal actions like breach of contract or unfair business practices.
Retaliation for Complaining About Unpaid Commissions
California law prohibits employers from retaliating against employees who raise concerns about unpaid wages or commissions. If you complain to your employer about not receiving the commissions you are owed, and the employer responds by firing you, demoting you, or taking other adverse actions, you may have a claim for wrongful termination or retaliation under California’s whistleblower protection laws.
A commission is a form of compensation typically paid to employees or contractors based on their performance, usually tied to sales or other measurable results. Unlike a fixed salary or hourly wage, commissions are variable and are often used as an incentive to drive productivity and achievement of specific goals. Here’s a more detailed look at what commissions entail:
Types of Commissions
Commission disputes can arise from a variety of issues, including:
Ambiguous Contract Terms
Vague or poorly defined commission structures can lead to disagreements over how much is owed.
Discrepancies in Calculations
Disputes frequently arise when employees believe they are not receiving the correct commission amounts. This can happen due to errors in sales records, misinterpretations of commission structures, or intentional underreporting by employers.
Performance Metrics
Disputes over whether sales targets or performance metrics were met can result in unpaid commissions.
Timing of Payments
Employers may delay commission payments, causing financial strain for employees.
Changes in Commission Structure
Employers may unilaterally change commission structures without proper notice or consent, affecting your earnings.
Unpaid Commissions upon Termination
Employees who leave or are terminated may find that their commissions are withheld. Employers might argue that commissions are not payable after termination, even if the sales were completed before the employee’s departure.
Under California law, employees are entitled to receive all earned wages, including commissions, even after termination.
If you believe you are owed unpaid commissions, it is crucial to take the proper steps to recover the compensation you deserve. Here’s a detailed guide to help you navigate the process:
Review Your Commission Agreement
Carefully review the written commission agreement or contract to verify whether your employer has adhered to the terms. Look for discrepancies between what was agreed upon and what has been paid.
Document Your Earnings
Collect all relevant documents such as sales records, emails, contracts, and payment statements that show the commissions you have earned but not received. Maintain a detailed log of your sales and the corresponding commissions you believe you are owed. This will be useful in supporting your claim.
Communicate with Your Employer
Schedule a meeting with your employer or HR department to discuss the unpaid commissions. Be professional and present your evidence clearly. If the issue is not resolved in the meeting, follow up with a formal written request outlining your claim for unpaid commissions. Include copies of your supporting documentation.
File a Complaint with the Labor Commissioner
File a wage claim with the Labor Commissioner or Department of Labor Standards Enforcement (DLSE). This is a formal process to resolve disputes over unpaid wages, including commissions.
Seek Legal Assistance
Consult a Los Angeles Commission Pay Lawyer as soon as possible. An attorney can provide legal advice specific to your situation and help you navigate the claims process. Additionally, they can help you determine if filing a lawsuit is the best course of action. They will handle the legal proceedings, negotiate on your behalf, and represent you in court if necessary.
Recovering unpaid commissions can be a complex and challenging process, but hiring an experienced Los Angeles Commission Pay Lawyer can significantly improve your chances of success in the following ways:
Knowledge and Guidance
An attorney will have a deep understanding of labor laws, including those specific to commissions and wage payments. They can explain your rights and the legal standards that apply to your situation, review your employment contract, commission agreement, and any relevant company policies to determine the exact terms of your commission structure and your employer’s obligations.
Evidence Collection and Documentation
A lawyer will help you gather and organize evidence such as sales records, emails, contracts, and payment statements to build a strong case, and assist in identifying and documenting any discrepancies between what you were promised and what you received.
Negotiations
Your attorney will communicate with your employer on your behalf, and negotiate to reach a settlement without the need for litigation, saving time and resources.
Filing a Complaint
Your lawyer can help you file a wage claim with the Labor Commissioner’s Office, ensuring all paperwork is properly completed and submitted. If necessary, they can draft and file a lawsuit in the appropriate court, ensuring all procedural requirements are met.
Representation in Legal Proceedings
If your case goes to court, your lawyer will represent you and fight for your rights. If you face retaliation from your employer for pursuing your unpaid commissions, your lawyer can take immediate action to seek additional damages for any retaliatory actions.
If you are facing a dispute over unpaid commissions, don’t wait to seek legal help. Contact an experienced Los Angeles employment lawyer today for a free consultation. We will review your case, explain your legal options, and help you take the necessary steps to recover your wages. Let us fight for your rights and ensure that you receive the compensation you deserve.