Can My Employer Cut Commissions I’ve Earned?

Q: After a large customer filed for bankruptcy, my employer deducted commissions I had received on invoices that were never paid.

Can the employer do this? If so, how can I get my money if my employer finally gets paid?

--D.T., Palm Desert

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A: The answer to your first question may depend on the terms of any written commission agreement you may have with your employer. However, the general rule is that, as with any form of compensation, an employer may not require an employee to forfeit commissions that he or she has already earned.

If your commission agreement or your employer’s policy provides that you do not earn commissions until customers pay their invoices, your employer would have the right to refuse to pay you commissions in the situation you describe.

If your employer finally does get paid, you certainly have the right to get paid too.

The easiest way to get your earned commissions probably would be to ask your employer to pay you. You also have the right to file a claim with the California labor commissioner or to file a lawsuit directly in court, even if you do not ask your employer first.

You do not need a lawyer to file a claim with the labor commissioner, and that office will process your claim for earned but unpaid commissions without any charge to you.

--Stacy D. Shartin

Employment law attorney

Seyfarth Shaw

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