Paying employees on commission? Clarify terms up front to defend against WPCL claims

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in Leaders & Managers,Performance Reviews

The Pennsylvania Wage Payment and Collection Law (WPCL) allows employees to sue their employers for unpaid wages, including commissions and the like.

Because the WPCL allows any wage contract claim, including oral agreements, it’s important for employers to clarify the terms up front and preferably in writing. That way, employees can’t come back later and claim there was an oral agreement for more money or that payments should have been calculated in a different way.

Recent case: Peggy Dardaris sued her former employer, Dental Organization for Conscious Sedation, when she was fired for poor performance. She said her former employer hadn’t paid her all the commissions she was owed.

The company gave the court copies of all Dardaris’ pay stubs, which showed how it calculated her commissions and when each payment was made. Dardaris said the calculations didn’t look right, but couldn’t point to any agreement between herself and the company that showed a different commission structure. The court dismissed the WPCL claim, concluding the employer had proven it had paid all it owed. (Dardaris v. Dental Organization for Conscious Sedation, No. 06-947, ED PA, 2007)

Final note: Have counsel review commission terms.  

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