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Payment of Commissions After Being Terminated

On Behalf of | Feb 18, 2014 | Commissions

Significant portions of Ohio’s working population earn their living in sales. A great deal of sales involves the payment of commissions by employers. This may lead to disputes between employees and employers regarding the payment of commissions.

Ohio Revised Code §1335.11 defines commissions as, “compensation accruing to a person for payment by another person, the rate of which is expressed as a percentage of the dollar amount of orders, sales, or profits.”

A common dispute arises over when the payment of commissions must be paid and unfortunately in Ohio there is no straight answer. Courts tend to review numerous factors including the prior course of conduct of the parties if the parties did not enter into a commissions contract. Courts also look to industry standards and, of course, Ohio statutes.

If an employee/employer do not have a written or oral agreement on the payment of commissions, the Courts generally look to when and how the commissions have been paid in the past dealings. After being terminated, Ohio Revised Code §1335.11(C) provides, “Upon the termination of a contract between a principal and a sales representative for the solicitation of orders for a product or orders for services, the principal shall pay the sales representative all commissions due the sales representative at the time of the termination within thirty days of the termination and shall pay the sales representative all commissions that become due after the termination within thirteen days of the date on which the commissions become due.”

In short, when terminated, your employer must pay your accrued commissions within 30 days from the date of termination. Further, any commissions earned “post termination” must be paid within thirteen days from the time you are termination. If you have to file a lawsuit to force the employer to pay your commissions, you may be entitled to recoup your attorney fees. Ohio Revised Code §1335.11(D).

It is important you have an experienced employment attorney to assist you in the recovery of commissions you are owed. Mowery Youell & Galeano’s experienced employment attorneys are here to help.

By: Nicholas W. Yaeger