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100% Commission Question Texas
I work on a 100% commission basis for a company with less than 15 employees. I'm paid on a bi weekly basis for my commissions. The pay cycle covers the previous two weeks worked. If I was layed off or terminated today, is my employer required to pay me my final paycheck within 6 days? I do not have any compensation plan in writing and have not signed anything that would indicate an allowance of this commission.
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- 16 Comments
- There are two issues here.
1. His threat not to pay you at all. This one is simple he can't do that.
Not so simple, actually. Since the OP was exempt under the Outside Sales classification, and that classification does not require a salary, if the commissions have not been earned, there is nothing TO pay.#1; Thu, 06 Aug 2009 06:15:00 GMT
- Be careful about signing the resignation form -- it might affect your ability to file for unemployment. I don't know whether you have earned/worked enough to actually get benefits or not though. I would write a note that states "in lieu of termination or layoff" on it. Or be able to prove that to the TWC during an appeal.
I'd also be careful about what the non-compete states and make sure you can live with it. Only you can know if the amount they are giving you is enough to sign away certain rights. I would strongly suggest speaking with an attorney prior to signing a noncompete.#2; Thu, 06 Aug 2009 07:44:00 GMT
- Since this posater was asked to sign 2 months ago, I presume the decision to sign or not has already been made.#3; Fri, 02 Oct 2009 11:48:00 GMT
- Yes, I mean he threatened not to pay me at all for my final paycheck. If I were to file a claim with the TWC if I do not receive payment on Friday(payday) or six days there after. Legally I have ground to collect on that money correct? Are there any cases where I would not be entitled to it?#4; Wed, 05 Aug 2009 15:09:00 GMT
- Just because you don't have a copy doesn't mean it doesn't exist somewhere. "Having to be present on payday" of course wouldn't apply if you were terminated; in fact, in Texas it specifically doesn't apply under the law. However, if that phrase meant "still employed" on payday instead of "physically present", then that very well may be legal.
Honestly, it's all going to come down to how commissions are defined as "earned". How has that been defined in the past?#5; Wed, 05 Aug 2009 17:44:00 GMT
- Yes, I mean he threatened not to pay me at all for my final paycheck. If I were to file a claim with the TWC if I do not receive payment on Friday(payday) or six days there after. Legally I have ground to collect on that money correct? Are there any cases where I would not be entitled to it?
There are two issues here.
1. His threat not to pay you at all. This one is simple he can't do that.
What form did this threat take?
2. His paying you by the next payday or within 6 days of termination, wichever comes first. Patty is right about the if there is an agreement. I have found when dealing with the TWC that when ever the question comes up to an employer, "Was there a written rule, agreement, ...? " The next question is, "How was the employee made aware of the rule, agreement,...?"#6; Thu, 06 Aug 2009 06:12:00 GMT
- Thank you all for your help. According to the information I don't believe I'm entitled to my final paycheck. However, my boss has agreed to pay my final pay check if I sign a resignation letter as well as a document stating that I'm under a non compete and that I won't file or participate in any lawsuits.#7; Thu, 06 Aug 2009 07:38:00 GMT
- If you are "commissioned only", I assume you were an outside salesperson, as that is the only legal way you could be paid in that manner.
In that case, it's going to depend on what the company policy/commission agreement says about when commissions are earned, and what a reasonable time is for the employer to calculate them.
If you were not an outside salesperson, please post back.#8; Wed, 05 Aug 2009 17:33:00 GMT
- Correct but my employer has threatened my final paycheck. Is this requirement universal? IE - even for people who don't have their comp plan in writing and/or people who were terminated or layed off in the middle of the week? How does this work for employees who resign?#9; Wed, 05 Aug 2009 14:53:00 GMT
- Nothing of my comp plan is in writing. They did send out an email a couple weeks ago that allegedly states that you must be present on pay day to be paid but I don't see how that's possible seeing as how this Friday's paycheck would reflect the prior two weeks that I worked. Yes, I am outside sales, that is, I make outbound cold calls to clients.#10; Wed, 05 Aug 2009 17:40:00 GMT
- Correct but my employer has threatened my final paycheck. Is this requirement universal? IE - even for people who don't have their comp plan in writing and/or people who were terminated or layed off in the middle of the week? How does this work for employees who resign?
First, I'm not 100% sure about what you mean when you say, "threatened my final paycheck." If they are refusing to pay you at all then that is a whole other matter.
Other than that the rule is state regulation and as all regulations is a lot longer than what I replied. But a quit and resignation are the same and in that case you are to be paid on the next payday.
If fired 6 days.#11; Wed, 05 Aug 2009 15:01:00 GMT
- I did think about this affecting my eligibility for unemployment. Unfortunately, I don't have the energy to fight my employer it's been a long few years and I really need that last check.#12; Thu, 06 Aug 2009 07:59:00 GMT
- dont sign a non compete dude it will eat your soul....#13; Thu, 01 Oct 2009 18:13:00 GMT
- Texas employers are required to pay within 6 days if the employee is fired or the next payday if the employee quits.#14; Wed, 05 Aug 2009 14:45:00 GMT
- I agree with Patty regarding the Outside sales Exemption. There is no minimum required. So it is possible that the comp plan could state that you have to be an active employee on the paydate to receive the commissions due. I know many commission plans written like that and the salespeople understand that they walk the last period's commission at the end of employment. But not all companies do it that way. It really is going to depend on how the plan is written. I suggest that the OP file a claim with the TWC. That will be the surest way to find out and the employer will have to provide the TWC with the plan details.
From the TWC's Texas Employer Handbook "Outside salespeople fall into a special category of exempt employees who do not have to receive either a salary or fee, or, for that matter, minimum wage or overtime pay; many such employees receive only a commission, while others receive that plus occasional bonuses, dividends, or overrides, depending upon the individual pay agreement in effect. Under 29 C.F.R. 541.500, an "outside sales employee" is someone who is "customarily and regularly engaged" away from the employer's place of business in making sales or obtaining orders for the sale of goods or services (see also 29 C.F.R. 541.501 541.502, which define the terms "making sales or obtaining orders" and "away from the employer's place of business"). The main thing to remember is that the pay for such an employee will be determined by the compensation agreement."
Then here is their link to what the TWC has to say about compensation agreements : http://www.twc.state.tx.us/news/efte/pay_agreements.html
Generally lack of documentation does fall on the side to favor the employee since the employer is responsible for communicating the pay plan clearly to the employee.#15; Thu, 06 Aug 2009 06:39:00 GMT
- There is no reason for the OP to not file a wage claim for the final check. This might not work, but it costs the employee nothing to try, and it forces the employer to legally defend their actions to TWC.#16; Thu, 06 Aug 2009 07:16:00 GMT