Many employers use a commission-based compensation system to motivate employees and boost performance. Commissions are particularly prevalent for jobs involving sales of goods or services, with employees often receiving a percentage of sales.
When an employer fails to pay your commissions, this can devastate your financial well-being. You have the right to pursue what you have earned with help from a knowledgeable employment attorney. Employees should immediately consult with a Deerfield unpaid commissions lawyer if they believe they were underpaid by an employer.
Employers are generally obligated to pay any compensation owed to employees under the terms of their employment contract or agreement under the Illinois Wage Payment and Collection Act, 820 Ill. Comp. Stat. Ann. § 115/1.
According to the regulations, this compensation includes earned commissions. When an employer fails to pay commissions as required by law, an employee can file a wage claim under the IWPC with the state’s Department of Labor.
The DOL will open an investigation and notify the employer that a claim was filed. When the employer continues to dispute the claim and refuses to pay the commission, the DOL will collect information to investigate the claim.
In many cases, the DOL must conduct a formal hearing to resolve the dispute. The hearing gives the parties an opportunity to exchange documents, present their supporting evidence, and subpoena necessary witnesses.
The hearing will take place before an Administrative Law Judge, who has the authority to determine the credibility of each side’s position based on the available facts. Since the hearing is a formal legal proceeding, employees may hire a Deerfield lawyer to defend their rights in disputes involving unpaid commissions.
It is important to note that the IWPC does not cover every employee. For example, independent contractors are not generally considered employees under common law.
The issue of whether a worker is an employee or independent contractor is not straightforward. Courts must examine factors such as the employer’s level of control over the worker.
Since many independent contractors also rely on commissions, the state has implemented the Illinois Sales Representative Act, 820 Ill. Comp. Stat. Ann. § 120/1. The ISRA requires payment of commissions to sales representatives that do not fall under the employee protections of the IWPC.
The ISRA generally requires that principals must pay agreed upon commissions within 13 days after the sales representative’s contract is terminated. The regulations define principals as any business entity that manufactures or distributes products for sale, contracts with sales representatives to solicit orders from customers, and compensates the sales representative with full or partial commission.
When a principal fails to pay agreed-upon commissions, a lawyer could help a sales representative file a civil lawsuit to recover damages.
Deerfield employers who do not pay commissions as required by law under the IWPC or the ISRA are subject to penalties, including paying damages to the employee.
Under 820 Ill. Comp. Stat. Ann. § 115/14, employers found guilty of violating the IWPC must pay damages equal to five percent of the underpayment to the employee. The damages accrue until the employer satisfies their obligations. Additionally, the employer must pay the employee a daily penalty equal to one percent of the underpayment until the wage obligations are satisfied.
Employers must pay the IDOL a $250 administrative fee, which increases to $500 or $1,000 if the amount owed exceeds $3,000 or $10,000, respectively. The IDOL can also penalize the employer at an amount equal to 20 percent of the underpayment.
For sales representatives, the ISRA states that a principal found liable in a civil action for failing to pay commissions must pay exemplary damages equal to three times the amount owed, reasonable attorney’s fees, and court costs.
Employers who fail to meet their payment obligations can significantly limit your ability to pay your bills. If you were underpaid, you should speak with a Deerfield unpaid commissions lawyer as soon as possible.
A lawyer can advise you on filing a wage claim and taking any necessary legal action. Contact us today to schedule a consultation.
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