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  1. #1
    Join Date
    Jun 2008
    Posts
    5

    Default Unpaid Commissions And Severance

    My question involves labor and employment law for the state of: TEXAS

    My husband was first put on a 2 month probation, but when asked the conditions to successfully come out of probation, his question was ignored and then dismissed 3 times. He was then told essentially he was going to get fired. Then a month after the probation began, he was fired by email, but the exit was to take place in 60 days. Then four days later his company decided to accelerate the exit to the next day. He was told a severance package of 10 weeks pay was to be expected. He did receive a letter the next day specifically outlining a severance (it was worded as "severance") based on 2 months pay equal to the same pay of the same 2 month period last year, plus benefits paid until the end of the 60 days.

    He was not specifically told how his trailing commissions would be paid out to him. His company pays on collected invoices, so typically the commissions may be 30-60 days out. We suspect that his boss is calling his last check his "severance" and does not plan to pay out commissions. We will know tomorrow morning when he meeets him to turn over computer and blackberry.

    If & when he does receive this severance and if he's asked to sign receipt of the check, will that nullify any later attempts to pursue payment of commissions?

  2. #2
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Unpaid Commissions & Severance

    Quote Quoting VickiVM
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    If & when he does receive this severance and if he's asked to sign receipt of the check, will that nullify any later attempts to pursue payment of commissions?
    If he receives severance pay, he might be asked to sign a severance agreement. He would have to read how it is worded. It could indicate that no additional payment from the co. will be required/due.

    Does he have a commission agreement in place?

  3. #3
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Unpaid Commissions & Severance

    I agree with Betty. He needs to read any severance agreement, sometimes call a release or waiver of claims, carefully. Most state that by accepting the severance that no further wages or commissions or payments of any kind are owed to him. If it states this and he signs it, that means that there would be no trailing commissions owed.

    I suggest taking any release or waiver and running it by an attorney to make sure he isn't signing away more than he realizes.

    That said, he needs to compare how much 10 weeks of pay and benefits is to how much commission he thinks he will be owed. Is the commission plan written down? What does it say about commission after termination?

    From the Texas Employer Handbook "A common problem is that of what happens with an employer's duty to pay commissions and bonuses once an employee has left the company. The answer depends upon the terms of the commission or bonus agreement. A good agreement will avoid the risks of ambiguity by clearly setting out how commissions are earned, when and under what circumstances they are paid, and what happens to commissions from sales in progress at the time of work separation. Similarly, a bonus agreement should specify exactly how a bonus is earned, when it is paid, and what happens to a bonus that is not determined or paid out until after an employee has left the company. If the commission or bonus agreement provides for payment of commissions and bonuses in any way after an employee has separated from employment, the deadline for such a payment would be based upon the wording of the agreement."

  4. #4
    Join Date
    Jun 2008
    Posts
    5

    Default Re: Unpaid Commissions & Severance

    No commission agreement. When he started 10 years ago there was very little commission to be made - only made draw salary the first year. All sales reps are paid commissions on collections and he still had a draw salary.

    He did meet his boss at the airport this morning and turned in his equipment. He did not have a severance for him - will probalby come in the mail once the return of computer/phone has been confirmed. My husband mentioned that he will send in final expense report and had done all the reporting necessary to close out all the pending invoices so that he would get paid for them and his boss didn't confirm or deny that he would get paid for them - he just indicated to send them to the home office. We don't think he even knows - only saying what he's been told to say.

    Our next step is to email the HR person (also one of the owners of the company) and ask specifically when and how his trailing commissions would be paid and if the company is picking up all premiums on health insurance thru end of July or only extending the coverage through that period and we would be responsible for our portion of premium.

  5. #5
    Join Date
    Jun 2008
    Posts
    5

    Default Re: Unpaid Commissions And Severance

    Update:
    Still no severance. Was told last week a package was sent out, but received only 401(k) rollover info. Called HR person this morning and he left a voice mail - "final check" s/b deposited next week (regular direct deposit schedule).

    We have several letters refering to "severance" check of a specific amount. No mention of trailing commissions. Nothing presented to sign (agreement). After receiving the voice mail, we believe that the severance is their intended last check.

    After receiving this, do we have a good chance of going after and getting unpaid commissions?

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