How long can an employer hold an employees supplemental wages such as commission pay? (For example if an employee takes a leave of absence can commissions be held for 30 days pending cancels).
Commissions must be paid in accordance with the written commission plan and/or in a manner consistent with the company's established practices. When commissions are earned and payable as set out in the plan, they must be paid to the employee. Failure to pay commissions when due may result in a complaint being filed with the department of labor and significant penalties. If the plan provides that commissions are only earned after the 30 day period during which a customer may cancel an account, then withholding the commission payments until that time is fine. However, if the plan does not have this type of provision and payments are typically made when an account is closed, then payments must be made in accordance with the plan and established procedures.
In addition to the issue of paying commissions in accordance with the plan, the employer must take care not to treat an employee differently simply because he or she is out of work on a leave of absence. If the employee is out of work on FMLA or a medical leave of absence, withholding commissions may well result in claims of discrimination, retaliation, or a violation of the FMLA.
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