Chapter § 6-11 § 61.015. Payment of Commissions and Bonuses

• Jurisdiction: United States

6-11 § 61.015. Payment of Commissions and Bonuses

(a) Wages paid on commission and bonuses are due according to the terms of:

(1) an agreement between the employee and employer; or

(2) an applicable collective bargaining agreement.

(b) An employer shall pay wages paid on commission and bonuses to an employee in a timely manner as required for the payment of other wages under this chapter.

6-11:1 Commentary

One Texas court holds that there is no cause of action against an executive under Section 61.

• Abatement Inc. v. Williams, 324 S.W.3d 858 (Tex. App.—Houston [14th Dist.] 2010).

6-11:1.1 Ambiguity to Be Interpreted in Favor of the Employee

The issue of when a commission or bonus should be paid arises frequently. Employers and employees often spend inordinate amounts of time negotiating how the amount of a commission or bonus is to be paid, but little time on contingencies, such as payment when an employee leaves. If there is ambiguity in the agreement, the employee will get the benefit of the doubt.

• Jourdan v. Schenker Int'l, 275 F. App'x 371 (5th Cir. 2003) (agreement that employee was to be paid 10 percent commission on gross profits from any sale; employee makes large sale and then leaves; employer refuses to pay commission, saying that employee must be employed at time commission is due (agreement said quarterly) and monies are collected from customer; employee argues that she was employed at time the deal showed a profit and thus her right to commission accrued then and could be paid post-resignation; court rules that because agreement is ambiguous, summary judgment is inappropriate for employer).
• Vassar Group, Inc. v. KO, No. 05-18-00814-CV, 2019 WL 3759467 (Tex. App.—Dallas, 2019) (summary judgment reversed for employer when there were competing interpretations of the meaning of "earning").
• Tex-Fin, Inc. v. Ducharne, 492 SW 3d 430 (Tex. App.—Houston [14th Dist.] 2016) (employee sought unpaid commissions by filing claim with TWC as opposed to filing suit; TWC found for employer but trial court disagreed; appeals court held that contract was ambiguous because there was no language as to when employee would receive bonus but that parole evidence clarified the ambiguity and that employee was properly paid; key was that there was substantial evidence to support TWC determination; question whether outcome would be different had employee elected to file lawsuit in court).

6-11:1.2 Conditions Precedent to Receive a Bonus

Employers thinking of...