Can A Company Withhold Commission Payment
You quit your job. Your employer hasn’t paid you. What happens next?
If you live paycheck to paycheck by a commission, it can feel frustrating when an employer withholds the money you’ve earned.
Employers should not deny or delay commissions from you whether you’re still employed or left the company. It’s highly unprofessional if it happens more than once and can lead to a lawsuit if it doesn’t get corrected.
In fact, the Fair Labor Standards Act (FLSA) sets rules regarding overtime and minimum wage payment. But it does not set rules regarding unpaid commissions. We break down what you should know below before you reach out to an employment attorney in Los Angeles.
Commission Agreements
Employers and employees have a contract that details how the company will pay the commission and when it will be paid. If the contract does not say that the employer can withhold commissions, they must pay a person according to the contract terms. State law dictates the terms of paying commission. For example, in Texas, the employer is required to follow all written or verbal agreement terms. States like California and New York require a written agreement – unless verbal arrangements have been made.
How Does State Law Affect Employees Who Have Been Terminated?
State laws can stop the employer from withholding commission payments even if the employee has been terminated. If not, an employer may have to pay damages, legal fees, and three times the owed amount. State laws can vary widely. That is why it is a good idea to consult with an attorney specific to your state.
How Deductions Are Applied
Employers have to withhold wage garnishments and payroll taxes from commissions. However, this is also dependent on state law. Employers should consult with an attorney if the lump sum amount exceeds $500.
Earned Wages
Some states require that all of an employee’s earned wages be included in their final paycheck, including commissions. The commissions must get earned during the time that the written agreement was enforced.
Contact Employee Discrimination Lawyers
If you feel that pursuing a lawsuit is in your best interest, a Los Angeles commission dispute attorney can determine how much your case is worth.