Step 1: Understand What Commission Is

You’re probably familiar with the type of commission used in sales jobs. Employees usually get a percentage of sales or a set amount of money based on sales growth.

For instance, many pharmaceutical and medical device companies pay employees commission that’s determined by an equation that looks at baseline sales and increases across a quarter.

However, there are other ways of calculating commission, such as:

•         Selling a certain number of units

•         Successfully booking appointments or viewings

•         Completing production on manufactured or assembled goods

•         Bringing in new clients or business accounts

•         Finding or selling real estate property

•         Launching a new service or product

•         Working extra hours over the holidays or busy months

In all of these examples, employees might be given a percentage of sales or might receive a flat fee. For instance, a worker could earn 10 percent of the price of all the office equipment they sell. Or their commission might be structured to pay out, say, $250 every time they sell $10,000 worth of equipment.

Some people work entirely on commission, with no base salary. They only make money when they have a sale or recruit a candidate for a new job.

It’s not uncommon either for middle managers to be paid for the performance of their team. They could get commission pay for their staff reaching a certain achievement at the end of every week or every month

Step 2: Document Your Commission Agreement

No matter what kind of commission you get at work, it’s essential to get the agreement in writing. This could be in your initial employment contract. Or it could be a separate agreement. Any time the way your commission is calculated changes, you should get an update in writing.

What should be included in your commission agreement?

•         How the commission is calculated (formulas, equations, charts, percentages, flat fees, etc.)

•         The time period during which commission is calculated

•         How much you will be paid for reaching whatever milestones are laid out

•         When your commission is to be paid (end of each month, end of the quarter, etc.)

It’s worth noting two important things here. First, commission is sometimes called a non-discretionary bonus. That means that if you meet the terms of the agreement, it must be paid. It’s different from a discretionary bonus, which is up to the employer, like a surprise check at the end of the calendar year.

Second, there can occasionally be conditions under which your employer is not responsible for paying commission. But these cannot include situations like you leaving the company voluntarily after earning your commission.

Step 3: Calculate Unpaid Commission

If your commission was paid and you believe you were shorted, it’s time to crunch the numbers and see what you’re missing.

Did you not get any commission at all? Or was the amount you got not in keeping with what you were expecting based on your metrics and your commission agreement?

Step 4: Speak to Your Employer About Discrepancies, If It’s Safe to Do So

It is possible that an error was made in calculating your commission or in getting the money to you. If you’re on good terms with your employer, first speak with them about any commission discrepancies you feel you have experienced.

Go into the meeting armed with all the documentation discussed above. This includes any employment contracts or commission agreements. It also includes any calculations you have made about how much commission you believe you should have received.

Pro tip: just in case your talk with your employer doesn’t go well, make sure you have all this information backed up somewhere at home. Don’t leave the only documentation on a work computer or on your boss’s desk. If things escalate or go south, you will need this proof later. Make a hard copy or keep an electronic file where you can access it at any time if necessary.

Step 5: Know California Law If Your Employer Still Refuses to Pay

Unpaid commission is considered a type of wage theft, according to California law. That doesn’t keep employers from trying tricks like:

•         Revising how and when commission is paid in the middle of the pay period

•         Firing employees so they don’t have to pay them commission

•         Intimidating and retaliating against employees who push for their pay

•         Refusing to put any details about commission in writing

You can file a wage theft claim with the State of California Department of Industrial Relations, though. They will investigate and decide if a violation has been committed.

Then, they will require the employer to pay you any commission you are owed.

Your employer might also be required to pay you unpaid overtime if your overtime pay is calculated using regular pay plus commission.

Step 6: Enlist the Help of an Employment Attorney

There are a couple of downsides to pursuing wage theft claims with the state on your own. First, state agencies typically have manpower shortages and a backlog of cases. So, it can take many months to get your issue resolved.

Also, you may worry about completing the paperwork properly and filing it correctly. This is a particular concern for people who speak English as a second language.

That’s why many people with unpaid commission and other workplace problems work with an employment attorney, like Employee Law Group. The team there can assist you with:

•         Putting together documentation about unpaid commission and wage theft

•         Determining if your employer violated any labor laws with your commission agreement

•         Evaluating if there are other workplace violations involved, like discrimination or wrongful termination

•         Filing official paperwork and helping you understand where you stand with a state investigation

•         Representing you in court if you decide to file a lawsuit

You no doubt work hard for your commission and count on it to meet your financial obligations. You don’t have to put up with unpaid commission and wage theft from your employer.

An initial consultation with Employee Law Group is absolutely free. If you do decide to pursue a case against your employer, you pay no fee unless we win your case.

To learn more or schedule an appointment, call us at 310-606-0065, or use our easy contact form to get in touch online at your convenience.