Is my employer required to pay commission after I quit or am fired?
In most states, commissions you already earned under the plan are wages and must be paid. States such as California (Labor Code) and Massachusetts (Wage Act, with treble damages) strongly protect earned commissions. Whether a commission is 'earned' depends on the written commission agreement's terms.
Can I recover a bonus if I left before the payout date?
It depends on whether the bonus is discretionary or nondiscretionary. Nondiscretionary bonuses tied to a formula or promised terms are generally recoverable and count as earned wages. Purely discretionary bonuses that require active employment on the payout date are usually not recoverable unless the policy or practice created an enforceable expectation.
What is the difference between a discretionary and nondiscretionary bonus?
A nondiscretionary bonus is promised in advance based on meeting defined metrics (sales targets, hours, production) and must be paid when earned, including for FLSA overtime regular-rate purposes. A discretionary bonus is awarded at the employer's sole discretion with no advance promise, and is generally not owed if unpaid.
What penalties apply if an employer withholds earned commission?
Many states impose penalties. California allows waiting-time penalties of up to 30 days of wages. Massachusetts mandates treble (triple) damages plus attorney fees for Wage Act violations. Filing with your state labor agency or suing can recover the commission plus these statutory penalties.