my employer is deferring payment of commissions because it's untenable to pay cash for commissions at this time because it will put the company at risk. I am not in agreement with his opinion. commissions were due in december and I've been getting the run

Commission plan was just in email from my boss. No signed agreement. Agreed to pay in December, but kept deflecting through March until I spoke with the owner who yet again deferred payment. I want to leave for another opportunity now. Have not notified them as of yet. This is the response I received about my commission due.

"The commissions you reference below represent approximately 30% of your goal for 2015, so your equity would have been approximately 5,000 options. Because we are in a situation where paying cash for commissions is currently untenable as it would put the company as a whole at risk, the company will issue a full 15,000 options to you and will continue to carry the commissions forward. Thus you will receive three times the equity you earned while deferring but not losing your commissions.

As with any start up, there will be times early in the company's growth that require each of us to recognize the situation and persevere. I hope you will do so now; as I mentioned yesterday, I believe we are close to demonstrating our business model will work. All of us must support that effort and work to make the equity in the company valuable. "

Please help

1 answer  |  asked Mar 20, 2016 9:16 PM [EST]  |  applies to Pennsylvania

Answers (1)

Christopher Ezold
Before I respond to your inquiry, I must state that we have not spoken, I have not reviewed the relevant documents and facts, and I do not represent you. Therefore, my discussion below is not a legal opinion, but is informational only. Finally, my discussion applies only to issues to which Pennsylvania, New Jersey or Federal law applies, unless otherwise specified.

That being said, an employer may not retroactively change how or when you are paid wages that are already earned. If, under the terms of the commission plan, you have already 'earned' the wages, converting them to equity or deferring payment is illegal and a violation of the PA Wage Payment and Collection Law. The violation is not only by the company, but by the individual officers who made the decision not to pay your wages due. Damages are your unpaid wages, a 25% penalty, and your attorneys' fees. You should speak with an employment attorney ASAP, as how you approach commissions due is trickier than hourly wages due. If you want to discuss, you can reach me at my number, below.

/Christopher E. Ezold/
610.660.5585

posted by Christopher Ezold  |  Mar 21, 2016 04:36 AM [EST]

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