At Premier Litigators, we regularly litigate disputes involving unpaid commissions and unpaid bonuses. Because of that, we are also familiar with the various industries and positions that utilize commission compensation, giving us practical industry-based insights into handling such claims. Below provides: (i) examples of the situations for which we are hired in connection with commission and bonus matters; (ii) and general information on of the law concerning commissions and bonuses in Florida.
Commission and Bonus Matters that We Regularly Handle
- Drafting or updating commission and bonus policies, which are often addressed in connection with employment agreements and/or restrictive covenants. We do more than simply ensure the policies accurately reflect the intent of our corporate clients; we also raise issues that are often not contemplated by others, with an eye towards mitigating potential disputes by addressing all conceivable areas of ambiguity. That approach ultimately saves our clients’ money, without reducing the incentives that such commissions and bonus structures were designed to provide in the first instance.
- Helping individuals, especially those in sales and in management positions, to determine if they have claims for unpaid commissions or bonuses. Often, employers misunderstand their obligations with respect to when commissions or bonuses must be paid. For example, many employers do not appreciate that, absent an agreement to the contrary, earned commissions must be paid to an employee even after that employee leaves the company. We have deep bench of attorneys who very regularly analysize whether someone is entitled to unpaid commissions or bonuses. We also regularly prepare for trial and arbitration over such disputes, as we are confident on our abilities to win.
Florida Law on Unpaid Commission and Bonuses
- Payment of commission tails post-termination;
- Recategorizing new accounts as house accounts; and
- Reducing or changing the commission percentage after sales were made.
As to bonus disputes, they often arise concerning entitlement to bonuses post-termination, as well as withholding of bonuses under any “for cause” provision of an employment agreement. The most common dispute concerns payment of commissions and bonuses post-termination.
Commissions generally must be paid even after an employee’s or independent contractor’s work relationship ends with a company – absent a mutual understanding to the contrary. This is common in industries where a sales producer obtains customers that pay for services or products on a monthly basis (e.g., insurance policies). There are several ways a company may ensure a mutual understanding is established that commissions are not due post-termination. Common examples include:
- A signed employment agreement that contains clear language indicating no commissions are due post-termination/
- An acknowledged employee handbook or policy that includes a similar provision that no commissions are due post-termination.
- In addition to making sales, the individual is also clearly responsible for servicing the client.
Similarly, whether a bonus is due post-termination also depends on the understandings of the parties. Absent a written document providing otherwise, an earned bonus is due even if the pay date for such bonus would be post-termination.
As reflected above, whether an individual has a contractual right to commissions or bonuses is not always black and white and may require a careful analysis of all agreements, policies, practices, and other facts.
Attorney Fees are Recoverable
Both unpaid commissions and bonuses are considered “unpaid wages” for purposes of Florida Statute § 448. That is important because that statute allows for the recovery of attorney’s fees if a party prevails in a civil action for unpaid wages. In some situations, liquidated damages (i.e., double the amount of wages due) may be recoverable under Florida Statute § 448.
Statute of Limitations
When is it too late to file a lawsuit under Florida law for unpaid commissions or bonuses? As set forth in Florida Statute § 95.11, the answer depends on the type of claim asserted:
- A claim for breach of contract has a four (4) years statute of limitation.
- A claim for unpaid wages under Florida Statute § 448 has a two (2) years statute of limitation.
Filing a lawsuit within the two-year statute of limitations is important to ensure that attorney fees are recoverable under Florida Statute § 448.
Other Practice Areas
Premier Litigation is litigation boutique with subject matter expertise in employment law. The attorneys at our law firm have handled a significant number of unpaid wage cases, representing both employers, employees, and contractors. Knowing ahead of time the strategies that the other party will likely use enables us to represent you more effectively and with confidence. Please visit the firm’s litigation practice areas for more details on the other type of disputes we handle and examples of past results.
