Unpaid Commissions

Although The Fair Labor Standards Act (FLSA) requires employers to pay hourly employees at least minimum wage and to compensate them for working overtime, the law does not specifically require the payment of commissions. For this reason, employees cannot enforce their right to receive commissions by filing a claim under the FLSA. Fortunately, Maryland law does allow employees to collect unpaid commissions in certain cases, so if your employer has refused to pay your agreed-upon commission, it is important to contact an experienced Baltimore employment attorney who can explain your next steps.

The Maryland Wage Payment and Collection Law

Like the FLSA, the Maryland Wage Payment and Collection Law requires employers to timely pay wages to their employees for the work they perform. The law broadly defines wages as all compensation that is due to an employee which, according to the statute, includes:

  • Bonuses;
  • Commissions;
  • Fringe benefits;
  • Overtime wages; and
  • Any other remuneration promised in exchange for service.

Maryland case law affirms that employers are required to pay their employees for work performed prior to their termination. One court clarified by explaining that a man whose job it was to generate and develop loans was guaranteed a commission even when the loans were not officially closed until after the termination of employment. The court reasoned that the former employee had obtained a completed application and other necessary documents and had only turned the files over to another employee for processing and closing before he left the company, and so had effectively earned the commission. In these types of situations, employers must pay commissions no later than the day on which the employee would have been paid if he or she had not been terminated from their employment.

Potential Damages

When employers do not pay an employee’s wages within two weeks from pay day, the employee can file a claim in court. Successful employees may be able to collect three times the amount of the unpaid commission in damages, in addition to attorney’s fees, if they can prove that the employer did not withhold the payment because of a bona fide dispute. A bona fide dispute is one in which the employer, acting in good faith, has a legitimate dispute over the validity of a claim or the amount owing to the employee.

Employees who have evidence that their commissions were not paid due to discrimination based on race, gender, disability, or another protected category, or out of retaliation, may also be able to file a claim against the employer for discrimination.

Contact a Dedicated Baltimore Employment Attorney

Employees who put in the work can and should expect to be compensated for their efforts. In Maryland, this extends to commissions, which according to state law, must be paid by an employer on a timely basis. A failure to make these payments is not only a violation of the employee’s rights, but can place him or her in dire financial straits. To speak with an experienced attorney about your own case, please call The Law Firm of J.W. Stafford, L.L.C at (410) 514-6099 today.