Aspirational content about entrepreneurship tends to insinuate that, if you get paid the same amount for every hour of work, you must be a chump. By this logic, the even bigger chumps are the ones who work 41 hours or more per week and don’t start getting extra pay until the 41st hour. The biggest chumps of all are the ones who get a monthly salary, so they get the same pay during the months when they worked 80 hours every week as they did during the months where they worked 40 hours per week, 30 of which they spent scrolling through décor items on Amazon that they would never be able to afford.
The entrepreneurship influencers tell you that people who truly take life by the horns get paid based on their accomplishments, not for punching the time clock. They tell you that the real go-getters get paid on commission. They spin words into gold; they could sell water to a shark. The reality is less glamorous. Getting paid on commission means that the size of your paycheck depends on how much other people can afford to spend, whether the weather is conducive to customers visiting your workplace, and so many other factors beyond your control.
Despite this, employees who get paid on commission have the right to fair pay from their employers or clients. The Bozeman commission dispute lawyers at HKM Employment Attorneys LLP can help you collect the commissions you earned for your work.
Does Working for Commission Mean All Work and No Pay?
Commissions are just one form of payment that workers can receive. If you get a certain amount of money for each hour you work, that is a wage. If you perform your work duties on an ongoing basis and receive a fixed monthly income, that is a salary. When a client pays you a pre-set amount for performing a finite task, that is a fee. By contrast, a commission is when you work for an operation that sells products or services with high dollar amounts, and every time you conclude a sale, you get a small percentage of the sale amount.
If commissions amounted to your entire income, you would be in a precarious financial situation indeed, living hand to mouth like every other gig worker, except with less frequent gigs. If you were a saltwater crocodile, then getting paid a straight commission would be fine, because saltwater crocodiles only need to eat every few months, but this is not you; you cannot keep the bill collectors at bay by telling them that you are getting another paycheck sometime between now and Christmas. Therefore, most employees who get paid on commission receive an hourly wage or a monthly salary in addition to their commissions. Their base rate of pay is high enough to keep them out of poverty but low enough that they have a strong motivation to pursue their commissions and put effort into finalizing their sales. These are some occupations where commissions form a part of the employees’ income:
- Car salespeople
- Insurance salespeople
- Real estate agents
- Real estate brokers who match tenants with rental properties
- Financial planners
Clearly Written Agreements are the Best Way to Ensure Fair Payment of Your Commission
Employers are free to set their own policies about paying commissions to employees in sales roles. In some industries, there are limits on the maximum percentage salespeople can take as a commission; this is to avoid unfair business practices and to keep prices affordable for consumers. It is also up to the employer’s discretion to decide the schedule for payment of commissions.
Montana’s wage theft laws stipulate that employers must pay former employees the full amount that the employee earned during his or her last pay period, the one during which the employee quit or got fired. That includes wages or salary earned, as well as commissions.
Many disputes over commissions arise from misunderstandings between the employer and the employee about which transactions qualify for commission payments and about the amount that the employee will receive as a commission for which type of transaction. For example, does the real estate broker only get a commission when a tenant signs a lease to move into an apartment, or does he or she also get a commission, albeit a smaller one, when the tenant renews the lease? The best way to prevent these disputes is by setting them in writing before employees get to work, trying to sell products in pursuit of the fabulous commissions they think they will get. Most employees do not have employment contracts, but if the employee has a contract, it should include provisions about commissions, if the employee is entitled to any. If the employee does not have a contract, then the employer should state its policies about commission payments in the employee handbook; before beginning work, employees should sign a statement certifying that they have read the employee handbook and understand the company’s policies about payment.
Resolving Disputes With Your Employer Over Your Commission Payments
All employees and independent contractors in Montana have the right to receive the money that their employers promised to pay them in exchange for the work that the workers performed, and this includes commission payments. If the promise of commission payment was in the context of an employment contract, and your employer did not pay your commission as agreed, then this is a breach of contract. You should follow the dispute resolution procedures stated in your contract, with the help of an employment lawyer. If you do not have an employment contract, but your employer did not pay you the commissions that you earned, then you should address this matter in a wage theft claim.
Contact HKM About Commission Disputes
The Bozeman employment lawyers at HKM Employment Attorneys LLP can counsel you about disputes with your employer over payment of commissions. Contact the employment lawyers at HKM Employment Attorneys LLP in Bozeman, Montana, to set up a consultation.
