When an employee is first hired, both the employer and the employee may sign an employment contract. This contract is the basis of the employer-employee relationship in the workplace. From time to time, employers will go back on what is promised in the contract, and violate an employee’s rights. This is particularly devastating when the breach of contract affects the employee’s commissions.
Failure to pay all promised wages and commissions is a violation of both state and federal law. Phil Gibbons understands how frustrating it is to not get the money you rightfully earned. Filing a lawsuit against your employer may be your best chance to recover the money you are owed. A breach of contract involving commissions lawyer in Charlotte can help.
Call today: 704-612-0038.
What is a commission?
Employers generally offer commissions or bonuses as an incentive for employees to work harder and achieve more. Employees will receive a certain amount of money on top of their base salary if they can sell a certain amount or complete a specific task. However, there are also some employees who work completely on commission.
Sales employees who work in the following fields are often reliant on commissions:
- Computer and software
- Auto industry (e.g., car dealerships)
- Stocks and finance
- Industrial equipment
- Call centers
Many employment contracts include terms and conditions relating to an employee’s commission payments. These conditions specify the amount of commission owed to the employee and when employers will pay.
If you have an oral, rather than written, contract stipulating commissions, it will be more difficult to recover what your employer owes you but we can help gather evidence that proves the validity of your claim.
What is a commission dispute?
Many employees work hard to earn their commissions but end up never receiving the money they earned. Under N.C. Gen. Stat. 95-25.13, employees must receive any commissions they have earned.
Earned commission cannot be subject to forfeit without a forfeiture clause in the employer’s policy (i.e., forfeiture clauses allow employers to withhold commissions if the employee does not work at the company at the time commission payment is due).
These are some of the most common commission related disputes that occur in businesses around the country.
Company Fails to Send Commission Check to Former Employee
Companies may fail to send a commission check to an employee for many reasons. One of the most common reasons is that it takes a long time for salespeople to collect their commission after earning it. As a result, many people end up leaving the company before receiving their commission and the company never mails the check.
The law requires employers to pay commissions to their employees, even if they are not with the company anymore.
Note: If your contract has a forfeiture clause, your employer may be within his/her right to withhold your commission payment.
Employer Refuses to Pay Commission
There are many reasons why an employer may refuse to pay an employee his or her rightful commission. In some cases, employers may refuse to pay an employee’s commission because the employer terminated the employee. Another reason for refusal may be discrimination.
Discrimination occurs when an employer mistreats an employee based on:
Anti-discrimination laws protect employees from unfair treatment in the workplace Employers who violate these laws may find themselves as defendants in a breach of contract lawsuit.
Employer Does Not Pay Full Amount Owed
Sometimes employers deduct too much money from an employee’s commission or bonus check. This can be purposeful or accidental.
What should I do if I have not received my commission?
If an employer purposely or accidentally failed to give you the commission you earned, you may be able to bring a lawsuit against your employer for breach of contract.
In order to recover damages, you will have to prove two main elements:
- That your contract clearly defines your right to a commission or bonus
- That the commission is in fact due (i.e., you actually earned it)
To prove the first element, you will have to determine whether your employer breached the terms of the contract with regards to your commission. If there is no mention of a commission in the contract, the court may determine that the commission was at the discretion of the employer and not fixed.
The second element is more difficult to prove. Employers and employees may disagree on when and if the employee actually earned the commission.
The written contract and communication between the employer and employee may help clarify this issue.
For example, an employer may claim that an employee only earns a commission when a customer sends the payment in. However, the contract may not expressly state that. If the contract does not mention this rule, courts will consider the communications between the employer and employee during the employee’s time at the company.
We can help you understand the terms of your employment contract and help determine when you earned your commission.
If possible, before leaving your company, you should collect as much information as you can about the commission rules. You will need to acquire copies of any contracts or documents you signed when you were hired. You will also need to collect information from employment handbooks and any e-mails or paperwork from your company discussing commission.
After we review all the documentation, we will have a better understanding of whether you have a legitimate case to recover your commission.
What can I recover?
If your employer has breached your contract by not paying you the commission you deserve, you may be able to file suit and recover these damages:
- The total amount of commission or bonus pay owed to you
- Liquidated (double) damages for failure to pay
- Additional damages may be available in cases where your employer fired you and refused to pay your commission in violation of anti-discrimination laws.
- Attorney’s costs and fees
We will investigate your claim and bolster your case with evidence to help prove your entitlement to compensation. We will represent you in court and fight to get you what you deserve.
When you start working for a company, you expect to receive fair payment for the work you do. Unfortunately, some employers fail to uphold their end of the bargain. Failure to pay employees commissions is unjust and illegal. The attorneys at Gibbons Leis, PLLC are here to help hold these employers accountable for their actions.
For more information on filing a breach of contract lawsuit, please call 704-612-0038.