If you work in sales, you know the grind. You spend months nurturing leads, closing deals, and hitting targets, counting on that commission check to pay the mortgage or pay your other expenses.
But what happens when you leave the company—or get let go—and the employer suddenly develops “amnesia” about that big commission check you’re owed?
In Utah, unpaid sales commissions are a serious issue. Whether you are an employee or an independent sales representative, state laws provide powerful tools to ensure you get paid every dime you generate. Here is what you need to know about your rights.
1. Commissions Are Often Considered “Wages.”
Under the Utah Payment of Wages Act, the definition of “wages” is broad. It generally includes amounts due for labor or services, whether calculated on a time, task, piece, or commission basis.
If you are an employee (W-2), your employer cannot simply withhold your commissions because you quit or were fired, or for any other reason. If you earned it under the terms of your agreement, it is likely legally yours.
However, if you signed a written agreement and it says that you aren’t entitled to commissions if you are fired, then you may not be able to get your sales commissions. It will all depend on the specific terms and conditions of the agreement.
2. The “24-Hour” Rule for Terminated Employees
If your employer fires you, Utah law is strict: unpaid wages become due immediately. They must generally be paid within 24 hours of separation.
If you resign, the rules are slightly different (usually due by the next regular payday), but the principle remains: they cannot keep your money indefinitely. If an employer fails to pay wages due within 24 hours of a written demand, they may be liable for a penalty of up to 60 days of wages to you.
3. The “Treble Damages” Weapon for Independent Reps
If you are an independent contractor (1099) working as a sales representative for a manufacturer or distributor, you might have even stronger protection under the Utah Sales Representative Commission Payment Act.
This statute is a heavy hitter. If a principal (the company) fails to pay a sales representative their commissions upon termination, they can be liable for:
- The unpaid commissions,
- Plus, damages equal to three times (3x) the unpaid commission amount;
- Plus, reasonable attorney fees and court costs.
This law exists to prevent companies from exploiting sales reps who build up a territory only to be fired right before the big checks come in.
4. “But We Don’t Have a Written Contract…”
This is the most common excuse employers use to avoid paying. While a written contract is always better, the lack of one does not automatically forfeit your right to be paid. Emails, text messages, commission sheets, and past payment history can all serve as evidence of the agreement.
Furthermore, under Utah law, companies often cannot force you to sign a contract that waives your rights to many statutory protections.
Don’t Let Them Keep Your Money
Sales professionals often hesitate to sue because they worry about legal fees or burning bridges. But consider this: If you generated the revenue, you earned the reward.
When a company refuses to pay commissions, they are essentially stealing your time, your effort, and your livelihood. You don’t have to fight them alone.
Getting the Legal Firepower You Need
If you are facing unpaid commissions, withheld bonuses, or wage disputes in Utah, you need an aggressive advocate who understands the nuances of employment and commission law.
David Head, Esq. specializes in fighting for the rights of employees and sales representatives. He knows how to leverage Utah statutes to recover not just what you are owed, but potentially penalties and interest as well.
Don’t leave money on the table. Call today to discuss your case.
David Head, Esq.
Phone: 801-691-7511