What is my recourse if my ex-employer is refusing to pay commissions after my resignation/
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What is my recourse if my ex-employer is refusing to pay commissions after my resignation/
I recently resigned voluntarily from my company where my compensation was split between a base salary and a quarterly sales bonus paid based on performance outlined in my commission plan. For further clarification, I managed a sales team and my variable pay was based on the percent of quota achieved. The fiscal year ends 12/31 and my last day of employment was 10/26. Upon receiving my final paycheck, it was clear that none of my variable compensation was paid out for either Q3 or Q4 sales. Upon contacting my direct manager, I was told that it is not company policy to pay the quarterly bonus if the employee departs prior to the bonus pay date which is typically 60 days following the end of quarter so 11/30 for Q3 and 02/28 for Q4. Since this is a performance-based bonus, tied to sales objectives and a compensation plan and not a discretionary one, can they really opt not to pay? I appreciate any insight/recommendations on how to handle this and if I should pursue it further with them or not.
Asked on November 21, 2018 under Employment Labor Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
There is no law specifically mandating when an employer must or must not pay out commissions, such as in the case of someone resigning prior to the payment date of the commissions. Commissions, unlike base pay or salary, is governed by the terms of the commission agreement (whether written or oral/unwritten) between employer and employee. If you have a written commission agreement or plan that addresses this issue, its terms control and you can enforce them in court, by a "breach of contract" lawsuit, if they would be beneficial for you. If you don't have a written agreement, then the employer's demonstrable policies--what they can be shown to have done in the past in similar cases--can be used to define the terms of the agreement or understanding. Past practice can be considered to demonstrate what the terms of the employment relationship were. What has your former employer done previously when a commissioned employee left? That can be used to show what they should do now.
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