Many sales professionals in the Detroit area get paid either totally or in part on a commission basis, meaning they make their living based on the dollar amount of their sales.
An arrangement of this sort does not violate the law per se, since employers can validly agree to pay commissions so long as they are still paying the employee the equivalent of the legal minimum wage.
Like any other wages, once a Michigan employer has a legal obligation to pay all commissions a salesperson earned in a given pay period.
Employers must pay commissions promptly and correctly
While a handful of employers may just outright withhold a salesperson’s commission, most are a little more covert about how they violate Michigan’s wage laws.
For instance, whether it is through simple carelessness or bad accounting or something more sinister, employers may shortchange a salesperson’s commissions rightly owed to her.
Another common trick employers use is unfairly charging the employee for general office expenses by withholding some of the employee’s commission.
Employers have an obligation to calculate and pay wages on time, and if they fail to do so, employees have options to recover what is owed them and other damages.
Employers cannot illegally terminate salespeople over commission disputes
A salesperson has the right to his earned commissions, and an employer may not fire him or otherwise retaliate just to avoid paying them. Likewise, if an employee feels he is not being properly paid as agreed, he is free to complaint to the appropriate government agency.
If an employer retaliates because an employee asked for all of her commissions, then the employer may have broken both federal and state laws and may owe compensation.