Robert S. Rifkin Labor and Employment Law Blog on Lawyers.com

Claims for earned commissions following termination of employment

Tuesday, December 8, 2009 by Robert S. Rifkin

Under Indiana law, an employee who is paid on a commission basis for his sales may be entitled to payment of commissions even after his employment is terminated.   If the employee has done all that he is required to do to complete a sale prior to the date his employment is terminated, he should be entitled to payment of his commission even at a later date unless the employer has a pre-existing published policy or established practice requiring a forfeiture of pending commission payments upon termination of employment.  

If an employee has procured a binding written sales contract from a purchaser of his employer's product or service, and if there is nothing more the employee is required to do to make the sale under the company's commission payment policy or plan. the employee has earned the right to be paid a commission on the sale even if the time of the commission payment is postponed until long after the employee leaves employment.  For example, an employee may be entitled to a subsequent payment of his commission even though, at the time of termination of employment, the product he sold has not yet been delivered or installed or paid for by the customer.   In such a case, the employee's right to be paid a commission would be vested, and contingent only upon the eventual delivery and  installation of the product, and the employer's receipt of customer payment.

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Posted at 15:12 PM
Topic: Labor and Employment
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