Kodiak

Senior Account Executive

Commission After Employment?

My company is asking for us to sign a new commission agreement. The big change within this new agreement is that if we quit or are terminated, then any unpaid commission is forfeited.

We are paid monthly on commissions so it isn't as large as a quarterly commission check but this is still alarming. All of my past employers have paid out commissions upon leaving so this is new to me.

What are everyone's thoughts on this new structure?

Does your company pay out commissions after quitting or termination?

Attached poll

Yes No

*Voting in this poll no longer yields commission.

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🧢 Sales Management

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35 comments

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Kinonez

Celebrated Contributor

War Room Enthusiast

Mine does, and every single company should. If the deal already went out during the time the rep was working, I see no reason why not include that during the final pay. Any company that does not do this looks bad, and It's a red flag in my book.

Santipodero

Politicker

Sanix

a company that does not do this gives a lot to talk about the company and they are not good comments

Kinonez

Celebrated Contributor

War Room Enthusiast

Yup, mayor red flag, I'd run far away if I could!

HarryCaray

Notable Contributor

HMFIC

termination, yes. Quitting, no.

poweredbycaffeine

WR Lieutenant

☕️

This.

FamilyTruckster

Politicker

Exec Director, Major Accounts

Always paid out my folks for time served. Pro rated based on when their employment ended for variable comp, and every commissionable piece earned.

people never forget how you (or the company) treat them on the way out.

definitely ask HR for clarity, or if you know someone with a legal background

Kodiak

Politicker

Senior Account Executive

You are the manager/employer we all look for. Thank you!

Law

Personal Narrative

Head of Business Development

100% agree, I also payout. People living the org are brand ambassadors and if treated badly will def sell out the org.

IAMAM

Catalyst

SADNESS

My last company paid commission monthly and as long as you were employed on the last day of the month, you got paid for those deals on the following check. For example, my last day of employment was July 7 and I was paid for all of my June sales on my July 15 check. Anything I sold in July, nothing was paid (I made damn sure to pull every deal I could into June knowing I was leaving).

Kodiak

Politicker

Senior Account Executive

This is one of the big flaws in this system. I addressed my hesitancies in signing the agreement today and our VP of Sales explained that it was normal and I shouldn't worry about this.

I brought it up that this isn't in the companies best interest because AE's will game the system which will result in lost time and opportunity. The ideal time to leave now is the 20th which is payday. We will have spent 20 days not really working with the knowledge of leaving and then give our two weeks notice resulting in 34 days (if two weeks is followed) of bogus work and not caring.

Law

Personal Narrative

Head of Business Development

We payout on both termination or quitting, especially if the deals are near the closing stage, it's that extra motivation to see it through to the end plus a great way to show an employee there is no bad blood. How you treat employees upon exit is just as important as during onboarding

CaneWolf

Politicker

Call me what you want, just sign the damn contract

That's illegal, especially termination. They can't do that.

Kodiak

Politicker

Senior Account Executive

I'm not a lawyer. Can you expand or cite precedence on if this is legal? I'd love to learn more if not.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

You can't fire somebody to avoid paying them. Where you do live?

Kodiak

Politicker

Senior Account Executive

US. We will still receive our base pay, this would only be a forfeiture of commission.

CaneWolf

Politicker

Call me what you want, just sign the damn contract

They still can't do that. It's effectively the same as saying "hey, we're firing you and not paying those 10 hours you worked." It's illegal and they know that. That comp plan doesn't hold up.

Especially if you're in a state such as NY or CA with really strong worker protections, you can just let them know when you leave that what they did is illegal and you'll be hiring a lawyer/filing a complaint with the Department of Labor to get those commissions.

Kodiak

Politicker

Senior Account Executive

Thank you!

Beasthouse

Opinionated

Corporate trainer

not necessarily. it depends on the contract and commission payout advance structure verbiage.

1) if the commission was paid upfront with the expectation of delivering service or maintaining an account going forward then that commission was paid for unexecuted tasks. thus they would not need to pay out if you are not able or going too complete the task.

2) if the commission is structured as a reward for previously executed tasks then they only have grounds to hold it until your clawback period ends.

beyond that sue the fuck out of em.

Beasthouse

Opinionated

Corporate trainer

also if you still within your trial period then no they don't owe you a dime

CaneWolf

Politicker

Call me what you want, just sign the damn contract

Trial period? Why are you accepting a job with a trial period?

Beasthouse

Opinionated

Corporate trainer

sorry miss translation, probation period. you know the time frame that you can legally fire someone with out owing severance packages. isn't it a legal standard?

CaneWolf

Politicker

Call me what you want, just sign the damn contract

I've literally never heard of anybody in sales having this in a contract. I would never sign one. And no, if you close a deal, they owe you money.

DungeonsNDemos

Big Shot

Rolling 20's all day

Might depend on the state you're in? I'd check state commission laws

Beasthouse

Opinionated

Corporate trainer

it depends. we hold it for like 30 days incase any cancelations come in

Beasthouse

Opinionated

Corporate trainer

so go check out the next thread that talks about signing bonuses... they exist to cover your losses of unpaid commissions or transition period loss of expected commissions..... so yes every company typically will not pay to someone leaving but you need to use it as leverage for where ever you are going.... does that make more sense

Lambda

Tycoon

Sales Consultant

They should unless contractually it says otherwise, why wouldnt you pay for performance?

TechHustla21

Valued Contributor

Mid-Market AE

Going through this same situation with my current employer. It primarily depends on the state you reside in. Here's a helpful link https://www.patriotsoftware.com/blog/payroll/final-paycheck-laws-by-state/. I think it's safe to stick around until at least the paycheck before you're expecting your commissions. Offer your two weeks with expectation they'll probably let you go before then!

braintank

Politicker

Enterprise Account Executive

The company I just quit did. As long as it was in closed won and had passed finance and deal desk review on or before your last day you got paid on it.

Mjollnir

Politicker

Account Executive

they better!

pretengineer

Politicker

Head of the crumpets

Personally, I got my last month of commish after leaving the next month (left in May, got the cheque in June). It was pro rated based on the variable. It was quite a nice surprise.

However, i know people who have learned this the hard way... It's not uncommon to deny commission. Always a good idea to check the employment contract or commission plan ahead of time. A day or two sometimes makes the $$ of difference. And hopefully you can have that discussion with your new employer - "I need to wait a week because otherwise I lose $x amount of bonus"

letmeseethatSaaS

Contributor

SDR Manager

Yes. All companies I’ve worked for have paid commission on anything you earn up to your last day (quit or get fired). This new policy they’re asking you to sign is awful!

SammySandbags

Politicker

Account Executive

Happened to my roommate after she quit... couldnt believe they still paid out her bonus

alecabral

Arsonist

-1

Director - Digital Sales Transformation

I do not know honestly!

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Kodiak

Commission After Employment?

Does your company pay out commissions after quitting or termination?

35 comments

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