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Sales Commission Question

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S

sales guy

Guest
Live and work in Arizona. Company is based in Connecticut.

Question: If a company terminates a sales person (or that sales person leaves the company voluntarily), is the company obligated to pay out commissions earned as of the date of termination? Specifically, sales that were booked prior to the date of termination (signed contract received and invoiced).
 


cbg

I'm a Northern Girl
That's going to depend upon the terms of the compensation agreement as well as state law. Your best bet would be to check with the Arizona Wage and Hour Division for general info, and if you have a written agreement, have it reviewed by a local attorney. AZ state law will take preference since that is where you both live and work. The state where the company is based really doesn't have much to do with it.
 
S

sales guy

Guest
Clarification

So, if I understand you correctly - AZ law prevails even if my employer is a CT company? Would it make a difference if my compensation plan document clearly states that "The Laws of the State of Connecticut Govern this Plan?"
 

cbg

I'm a Northern Girl
It might - as long as the laws of CT are equal to or better than the laws of AZ as far as you're concerned. If there's anything in the AZ law that is more beneficial to you, however, I think the AZ DOL will force them to see that you get that benefit.

If it helps any, while I have no direct experience with AZ I do have some in CT. And for what it's worth, we changed our deferred compensation plan due to financial problems - we couldn't afford the more generous plan any more. A CT employee sued us and we lost - we had to pay him the more generous plan and we had to keep paying him his commission TWO YEARS after he quit! (My boss was too nice a guy in writing the initial agreement.) So that being the case, my guess is that if CT law holds, they'll have to pay you for any commission you've earned up to the last day of work, and possibly, depending on the wording of your agreement, even longer.

Talk to a local attorney for the best advice.
 

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