Can an employer not pay commissions because my client won’t pay their bill?

My employer’s new policy is that

Asked on October 26, 2017 under Employment Labor Law, Colorado


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, this is legal. While an employer must pay base salary or wages whether or not the empoyer itself is paid, commissions are not protected the same way: the payment of commissions may be predicated on the customer paying since, after all, if the customer does not pay, there *was* no sale in any real sense and nothing to commission on. While many employers do it differently--paying the commission, but then "charging back" (debiting back; recovering from the employee) commissions on any bad debts--the end result is the same: the employee does not ultimately get commissions when the customer never paid. So what you describe is legal.

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