As if earning income is not already difficult, employers who refuse to pay wages make the situation unbearable for workers. Unfortunately, wage theft is common in various industry sectors. Commission-based workers are part of the workforce who have to endure this misconduct.
Determining what types of payment fall under “commissions”
Under California labor laws, sales commissions are earned wages. Hence, employers intentionally failing to pay them can be liable for wage theft.
However, employees and independent contractors should not mistake almost identical forms of payment as commissions. The state law generally does not cover short-term productivity bonuses, temporary incentives, profit-sharing plans and similar benefits.
Knowing if there is a legal right to sue
A salesperson pursuing a wage theft lawsuit against their employer must establish the following circumstances:
- The employee or independent contractor is involved in the sale of a product or service.
- The commission earnings are a percentage of the price of the product or service sold.
- The employer intentionally withholds, delays or refuses payment of the earned commission.
When in doubt, having an experienced labor attorney review the facts and circumstances of the case can help determine whether there is standing to sue.
The importance of agreements in wage theft claims
A contract detailing the terms of the employment can determine whether the salesperson can sue for unpaid commissions. Moreover, the agreement holds a significant weight in proving wage theft in court. Accordingly, it is more challenging to support the claim if there is no written agreement, especially since it is the employee or independent contractor who has to prove their claim.
Many workers hesitate to come forward and sue employers performing unfair or illegal employment practices, carrying worries such as lack of standing or weak argumentation. Nevertheless, a proper understanding of the law and competent representation can help ease these concerns.