An employee’s entitlement to unpaid commissions after employment ends is a major source of confusion. This confusion is illustrated by a recent case decided by the New Hampshire Department of Labor.
In this case, a salesman worked for a weekly salary plus certain commissions in the form of incentive bonuses provided his sales exceeded certain sales goals. During his employment, he worked on a number of sales and orders that weren’t completed and paid at the time he was terminated from his employment. Those sales and orders were eventually completed and paid by the customers generating sales numbers that would have put him substantially over the goal that triggered payment of incentive bonuses. The salesman filed a wage claim with the New Hampshire Department of Labor seeking more than $50,000 in unpaid commissions. The employer claimed that no commission was due because substantial additional work had to be done by others. The Department of Labor ruled that a person employed on a commission to solicit sales orders is entitled to his commission when the order is accepted by the employer.
New Hampshire follows the “general rule” on payment of commissions:
“[A] person employed on a commission basis to solicit sales orders is entitled to his commission when the order is accepted by his employer. The entitlement to commissions is not affected by the fact that payment for those orders may be delayed until after they have been shipped. This general rule may be altered by a written agreement by the parties or by the conduct of the parties which clearly demonstrates a different compensation scheme.”
In the above case, because there was nothing in writing to depart from this general rule that would have required him to be employed on the date the orders were completed and paid to receive the commissions, the Department ruled he was entitled to commissions. If you have a similar issue or any type of wage claim, please feel free to call us because we represent employees like you.