Unpaid Commissions, Bonuses and Tips


What qualifies as a commission?

California law defines commissions as compensation paid to any person for services rendered in the sale of such employer's property or services and based proportionately upon the amount or value thereof.  Commissions differ from bonuses in that the employee must be principally involved in selling the goods or services upon which the commission is measured.

My employer did not pay my earned commissions after I was terminated?

When you are terminated (as opposed to quitting) and have performed at least some of the requirements to earn your commission you may be entitled to recover all or a pro rata share of your commissions. If you have performed all of the requirements then you are likely entitled to the full commission because under California law a commission is earned when all conditions required for the commission have been met.

What are some typical commission issues that an attorney can help with?

Employers sometimes use commission plans as a way to induce employees to perform their jobs without having to adequately compensate them. Some common issues that arise include the employer altering the commission plan in the middle of the year, a customer refusing to pay for a sale already completed by the employee, or the company refusing to acknowledge the employee as the originator of a sale. Issues also arise when an employee is terminated or quits and the terms of the commissions have already arguably been completed. A qualified attorney can advise you further on any commission issue.


What constitutes a bonus?

A bonus is money promised to an employee in addition to any monthly salary, hourly wage, commission or piece rate usually due as compensation.  A bonus is typically provided for performing extraordinary work such as for good performance or contributions to a company's increased annual profits.

Does my employer have to pay my bonus if I quit my job?

It depends on the terms of your employer's bonus plan. If the bonus is not expressly conditioned on continued employment an employee who voluntarily leaves employment may be entitled to the bonus if other applicable conditions have been satisfied.

For instance, if an employer's bonus plan stated that the bonus was not contingent on continued employment, then an employee who quit in February 2013 would likely still be entitled to any bonus paid to employees for 2012, assuming all other conditions were met.


What obligations does my employe have to let me keep my tips?

California law states that a tip is the sole property of the employee to whom it was paid, given or left for. Employers often violate this law by engaging in unlawful tip pools where tips are misappropriated to supervisory employees, or other employees who are not entitled to them. California law requires that tip pooling schemes do not result in deductions from an employee's wages, do not permit management to obtain any portion of the tips, and do not cause any employee's pay to fall below the minimum wage.

What can I do if my employer has denied me tips?

The California Supreme Court recently curtailed an employee's right to bring a private cause of action in state court to recover losses incurred from withheld tips or unlawful tipping pools. However, employees still have other avenues for redressing tip pool violations, such as through lawsuits claiming misappropriation or conversion of tips or through unfair competition law claims for providing tips to "agents" of the employer.

What can I do if after collecting my tips I still do not make the state minimum wage?

An employer's tip distribution policy may cause employees to forfeit so much of their tips that their total pay falls below the state minimum wage.  An employer in such a situation would be subject to liability for failure to pay the state minimum wage and an action could be brought in state court or with the Labor Commissioner.

How can an attorney help you?

Claims for unpaid commissions, bonuses, and tips can often involve undertaking a complex analysis of an employer's polices and procedures as well as any implied or written compensation agreement you have. The law in these areas is complex and in some cases unsettled.

A skilled employment attorney can explain the law and your alternatives after reviewing the facts of your case. In many cases of unpaid commissions, bonuses, and tips you will not be the only employee in your company who has been denied compensation. In such cases, a class action or other type of representative action may be appropriate. We are well-versed in issues pertaining to unpaid commissions, bonuses, and tips and can advise you on any issue you are facing.

Remember: no recovery, no fees. We only get paid if we obtain a positive recovery in your case.
We can review the facts of your case and give you an honest evaluation of any commission, bonus, or tipping issue you are facing. 

Phone: 213.275.2018

Online: Case Evaluation Form

Socal Employment Counsel - Representing Employees in Workplace Disputes Throughout Northern California
Contact an experienced employment lawyer today
Employment Law FAQ