Will I Still Receive My Commissions If I No Longer Work For My Employer? - Doubleday Law in Boston Massachusetts

Will I Still Receive My Commissions If I No Longer Work For My Employer?

Commissions

Commissions

The Massachusetts Wage Act addresses the issue of commission payments by an employer to an employee.  In such, it deems that a commission becomes “due and payable” when the amount is definitely determined.  Simply put, if a sale is final and an exact commission has been earned, that amount is due and payable to the employee regardless of current employment status.

This statue was confirmed by U.S. District Court judge Alliston D. Burroughs in Israel v. Voya Institutional Plan Services.  Further highlighted by this case is the fact that the payment requirements of the Massachusetts Wage Act can override conflicting provisions in a commission plan offered by an employer.

The Plaintiff, Joel Israel, worked for Voya Institutional Plan Services as a sales representative in retirement services.  His pay structure included a base salary plus variable commissions based on investment decision made by investors who allowed Voya to act on their behalf.  For example, if an investor whose account was managed by Israel allowed Voya to move their investments to an account with a higher yield (referred to as a “production activity), then Israel would receive a commission.  Those commission payments would be made to Israel “in the payroll immediately following the third month after the month that a production activity occurred.”  That same commission plan also stipulated that an employee who resigned from Voya “would not be entitled to any pro-rated payment of commissions following his resignation.”

Joel Israel applied to his employer, Voya Institutional Plan Services, for an inter-company transfer in July 2014.  He requested to be moved to a position with a different Voya entity.  After some consideration, Voya settled upon the belief that Israel had not been truthful about his reason for leaving his previous employer.  For that reason, they made the decision not only to deny his transfer request, but to terminate his at will employment.  Ultimately, Voya allowed Israel to resign in lieu of termination, which he did on September 26, 2014.

At the time of his forced resignation, Israel was owed $32,000 in commission payments from Voya, which had not yet become payable due to the 3 month delay stated in the commission pay structure.  Voya failed to pay Israel these commissions at the 3 month point, or at any time thereafter.  Thus became the basis of Israel’s lawsuit.

Israel’s case consisted of two main arguments.  (1)  If he had not voluntarily resigned, he would have been fired in an involuntary termination.  This termination would have affected his good standing with the Financial Industry Regulatory Authority, which would have affected his ability to continue to work in the financial industry.  Therefore, he argued that he should be entitled to his commissions because he was forced to resign.  The Judge disagreed with this argument based on the fact that the allowed resignation in lieu of termination benefitted him by securing his good standing.  (2)  Israel argued that the Massachusetts Wage Act entitled him to his commissions regardless of his current employment status.  The Judge agreed with him on this argument due to the fact that the commissions were “definitely determined” at the time of his separation from Voya.  In other words, the “production activities” that produced those commissions were finalized, and the commission amounts were secured.  For this reason, the commissions were due and payable, and the Judge ruled in Israel’s favor. Voya was ordered to pay him $32,000.

If you have been denied commission payments due to your employment status with an employer, you may have rights under the Massachusetts Wage Act which will allow you to collect, even if you are no longer employed with that company. 

 

Arthur Hardy-Doubleday

About Arthur Hardy-Doubleday

Arthur Hardy-Doubleday practices law in Cambridge and Martha’s Vineyard Massachusetts. He works in the areas of Real Estate, Personal Injury, and Consumer Protection Law. When not practicing law, Arthur enjoys sailing, hanging out with friends on the beach, and waking his dog “Ridiculous.”