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Are You Entitled to Commission After Quitting or Getting Fired?

July 19, 2016 Employment Agreements

What employees need to know about the Pennsylvania Wage Payment and Collection Law

Leaving a job while waiting for a commission or bonus check can be an uncertain prospect.

Although you believe you fairly earned the compensation, you probably suspect that it will be harder to collect that money once you’re out the door. And if you were fired, the prospect of getting your due compensation may seem even less likely.

The question is, how are these situations handled under the law?

Like most legal issues, the particular circumstances of the situation can have a big impact on the outcome. However, it’s important to be aware that you may not need to forfeit earned commissions, bonuses, or other types of wages just because you’re no longer with a company.

Let’s take a look at what Pennsylvania workers should know about their rights under the Pennsylvania Wage Payment and Collection Law (WPCL).

Not Just Money

The WPCL offers protection to employees who are owed wages by their employers and former employers.

Under the law, wages may include:

  • Regular pay
  • Commissions
  • Bonuses
  • Fringe benefits, such as earned vacation time or paid time off that has not been used
  • Expense reimbursement

In order to collect owed wages under the WPCL, individuals must be able to prove that they have a contractual right to the compensation.

Luckily, the law is somewhat flexible on how that “contract” is established. Obviously, a written contract would satisfy this requirement. However, a written company policy detailing pay practices and disbursement of benefits may also suffice.

In the absence of either of those, a contractual relationship may also be established based on past history. That is, if the company generally pays commissions three weeks after a sale, that may create a precedent that could be considered a contractual relationship under the law.

Timing is Key

Bonuses, even when tied to quotas or other goals, may still be considered discretionary and therefore somewhat harder to collect in the absence of a strong historical precedent.

Commissions are generally based upon a percentage of sales and may be generally easier to quantify. However, payment of commissions may hinge on when the commission was earned. The “earn” date may differ greatly depending on company practices.

For example, some companies may consider the commission earned when the sale is made, while others may consider the commission earned after a product is shipped, a bill is paid, or the time window for returns has passed.

Again, written employment agreements between the employee and the employer may spell out parameters and, if none exist, past payment history may be relied upon to determine the “earned” date.

Don’t Leave Money on the Table

The WPCL has some extremely worker-friendly components to it that may make it easier to collect owed compensation.

First, the law states that employees who are shown to have legitimate claims for recovery may be granted attorneys’ fees.

Second, employees may also be entitled to penalties if the employer has withheld compensation without a “good faith” reason for doing so, such as a dispute about the amount owed. However, even in disputes, employers are still obligated to pay the undisputed amount owed within a reasonable time (generally within the next regular pay period).

Finally, the WPCL allows for certain employees who are decision makers within the company to be named as individuals in lawsuits if they were personally responsible for withholding pay.

Contact the Murphy Law Group Now for a Free Consultation

If you feel you’re owed compensation from a former job, it’s best to seek legal advice right away.

Email us at murphy@phillyemploymentlawyer.com, or call (267) 273-1054 for a free consultation.