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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 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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