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Getting Paid Sales Commissions Owed by Former Employer

On Behalf of | Jan 16, 2015 | Employment Law

Under New Hampshire Law, sales commissions are a part of wages by statute and an employee has the right to bring a wage complaint before the New Hampshire Department of Labor in Concord or a complaint in the Superior Court to collect those commissions. Generally, for many cases, the New Hampshire Department of Labor is the best place for an employee to go for such a claim, not only because it is quicker, but the hearing officers work with these types of cases on a day-to-day basis. Such a wage complaint can be heard within 2 to 3 months from when it was filed. In the Superior Court, it could be over a year before a case is heard. Also, the hearing officer will render a decision within 30 days after the completion of the hearing.

Whether commissions are due depends on what the written policy is that was provided to the employee and what it states in regards to when commissions are due and owing. An employer runs a substantial risk of losing a sales commission dispute as to when and if a commission is due if it does not have a clear written policy about payment of sales commission that was given the employee before he did the work that he claims entitles him to a commission. There is a distinction between when the employee has the right to a commission and when a commission is actually due. There are three major events in a sale important to a commission. The first is when the salesperson books the order making the sale on behalf of the company. The second is when the company accepts its employee’s sale to the customer. The third is when the customer has paid for the sale. Often companies clarify in writing that the commission is not due until the customer has paid, however, that does not mean that the commission was not earned by the employee. If the employee booked the sale on behalf of the company and the company has accepted the sale, the employee either quits, is laid off, or is fired, and the customer thereafter pays for the sale, the question becomes whether the commissions are owed the former employee. Under New Hampshire law, absent there being a written agreement or policy that sales commissions are not earned unless the sale is paid for by the customer prior to the termination of employment, an employee is entitled to commissions on sales closed as of the termination date; meaning that the customer sale has been accepted by the company as opposed as to when the sale order is collected. The commission may not be due until after the employee leaves his employment because the customer still has not paid, yet it will need to be paid once the customer has paid.

It is possible that the Department of Labor hearing officer might award liquidated damages up to twice the amount due. If the employee is thereafter represented by counsel, he may be able to get her attorney’s fees in the Superior Court.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].