Legal Q?: Commission Due to Me and I Quit and They Don't Have to Pay?

[phxjcc]

Short version.

HR asking everyone to sign a new doc.

The doc says if I quit and am due commission for 1 or more sales, they do not have to pay me.

They are requiring all 1099 and employees to sign.

I am refusing to sign.

Need answer fast, as in by tomorrow at 9 am PST.

Yeah, yeah, you are not my lawyer, blah blah blah.

ETA: State is California

[running_coach]

From here.

**10.**I am a commissioned salesperson and was just discharged from my employment. When must my final wages be paid?

A. 	In the event the commissions have been "earned" on or before the date of your termination, the employer must complete the necessary calculations and pay the commissions on the date of the termination in the case of a discharge or a voluntary quit with more than 72 hours prior notice, or within 72 hours of the termination of the employment relationship in the case of a voluntary quit without such prior notice. It is not permissible for the employer to wait until the customary time for calculating the commissions of current employees, nor is it permissible to delay payment of such earned commissions until the next regularly scheduled payday. If the commission has not yet been earned at the time of termination and is awaiting the completion of some legal condition precedent, for example, receipt of the customer's payment, the commission must be paid to you immediately upon completion of the condition precedent.

You can’t sign away your rights to your pay.

[friedo]

@running_coach

From here.

That doesn’t say anything about what happens if you quit.

[running_coach]

@friedo

That doesn’t say anything about what happens if you quit.

From the quote.

or a voluntary quit with more than 72 hours prior notice, or within 72 hours of the termination of the employment relationship in the case of a voluntary quit without such prior notice

[MikeG]

@friedo

That doesn’t say anything about what happens if you quit.

Sure it does. It says voluntary quit three times and even differentiates between giving less than or more than 72 hours notice.

[phxjcc]

Thank you all!

[friedo]

@running_coach

From the quote.

Well I’m pretty dumb this evening.

[Colibri]

Legal advice is best suited to IMHO.

Colibri
General Questions Moderator

[Really_Not_All_That_Bright]

@running_coach

You can’t sign away your rights to your pay.

That is an oversimplification. The commission is “earned” when the employer’s policy says it is earned. The employer’s policy may require the employee to remain with the company for a period certain beyond a sale for the commission to be earned. However, that would be addressed in the handbook.

[Wrenching_Spanners]

IANAL. Realising that you may want to maintain anonymity, are you able to say what industry you’re in? The legality is going to depend on the specifics of your contract, and contractual practices are often consistent within a given industry.

My two cents is that if your job is straight commission, the company will be obliged to pay you, whatever you sign. It’s illegal for them to try to make you work for free. However, if you’re receiving a salary, and the commission is considered to be a bonus paid following the end of some period, then it most likely will be legal for the company to not pay out that bonus. Deferred bonuses are designed to allow companies to claw back owed payments if a sale or transaction is structured to be a short-term gain but a long-term loss. They also act as “golden handcuffs” to discourage successful employees from leaving.

[ZonexandScout]

@Really_Not_All_That_Bright

That is an oversimplification. The commission is “earned” when the employer’s policy says it is earned. The employer’s policy may require the employee to remain with the company for a period certain beyond a sale for the commission to be earned. However, that would be addressed in the handbook.

I’ve run into this quite a bit. Some commission policies (e.g., for selling a service contract) state that the salesperson doesn’t earn the commission until 90 days (or some other period) after the sale. Otherwise, a salesperson who plans to quit could sell a lot of the product to friends and the homeless, collect the commissions, and leave the employer to deal with all the cancellations. I’ve seen this done more than once.

[Wheelz]

I don’t really have any advice for you, but I would probably share your gut reaction to refuse to sign. That could go badly for you, though; I have no idea.

I do hope you’ll let us know what happens.