What happens to my commissions if my employment is terminated without cause?

Commission-based employees are generally entitled to commissions earned up to the last day of work. If an employer is denying commissions, it is critical to determine at what point the commission is considered “earned” by the employee.  If the employee has already earned the commission, then the employer legally has to pay out the commissions.  Whether a commission is earned may depend on whether a sale has closed and the customer has paid for the good or service, or it could depend on other factors based on the organization’s usual commission practices. 

Separately, the employee may be entitled to loss of commissions that would have been earned and payable for a period of time following termination, which is known as the common law notice period.  Under the common law, an employee is entitled to reasonable advance notice of termination or payment in lieu of notice, which is a severance package.  As part of that severance package, the employer should include compensation for lost incentive pay, commissions or bonuses, that the employee would have earned during the relevant notice period.  

Even if commission plan terms stipulate that commissions are forfeited following the employee’s dismissal, this does not automatically mean that the employee is not entitled to compensation for the loss of commissions. Do not assume or take it at face value that you are not entitled to incentive-based compensation upon termination simply because the employer says so.