If you resigned and your employer withheld commissions you had already earned, labeling them discretionary or only for active employees, that money may still be yours. In Pennsylvania and New Jersey, earned commissions can be treated as wages, and a policy does not automatically override wage law.
The deal that paid for itself, then didn’t
He sold medical equipment across South Jersey, which mostly meant a lot of highway miles and a lot of waiting in hospital procurement offices for meetings that got pushed. For a year he had been chasing one account in particular, a regional hospital system, the kind of deal that does not close on a handshake but on a hundred small concessions, demos rescheduled around surgeries, and spec revisions emailed at eleven at night.
In July it finally came together. The contract was signed, the system was onboarded, and the commission on it was, frankly, the reason he had stayed in the job through a flat couple of years. It was the payoff for the year of miles.
In August he decided to move on. He did it cleanly. Two weeks’ notice, a warm email to his manager, an offer to help transition the new account so the hospital would not feel a bump. He wanted to leave the door open, because that is how the industry works.
Then his final paycheck landed and the commission on the hospital deal was simply not there. Not reduced. Gone. He read the stub three times and then called payroll, who routed him to his manager, who gave him a one-line answer. Commissions were discretionary, and the company only paid them to employees who were still active on the payment date.
He sat with that for a while, because on its face it almost sounded like a rule. But he had closed the deal in July, while he was an employee, under the plan that was taped to the inside of every rep’s playbook. The company was not deciding whether to reward him. It was deciding that his two weeks’ notice had reclassified money he had already earned into a bonus it could cancel.
Earned is earned
The word discretionary does a lot of quiet work in stories like this. Employers reach for it precisely because it sounds like a legal term that settles the question. Whether it actually applies usually turns on the facts and the plan language, not on the heading in the handbook.
The deeper point is about timing. He had already done the work that generated the commission. A company does not generally get to rewrite the rules at the exit door and relabel earned wages as a favor it is choosing not to grant, with the trigger for canceling it being that the employee had the nerve to quit.
What Pennsylvania and New Jersey wage law can say
In Pennsylvania, the Wage Payment and Collection Law can treat earned commissions as wages that must be paid. New Jersey’s Wage Payment Law can work the same way. Some plans include an active-employee clause, a requirement that you still be on the payroll when commissions pay out, and those clauses are not always enforceable. Their effect can depend on when the commission was actually earned.
The frequent deciding factor is simple to state. Did you earn the money, under the plan that existed, for work you already performed. If the answer is yes, calling it discretionary at the exit may not make it disappear, and wage claims in both states can sometimes carry more than the unpaid amount itself.
Why he could prove it
He kept his commission plan and the records of the deals he had closed, which mattered more than he realized at the time. Access to a work email and a sales dashboard can vanish the day employment ends, and memories fade fast. The plan plus the closed-deal records turned his can they really do this into a concrete question a lawyer could actually answer.
If an employer has zeroed out commissions you earned, save the plan, save the proof the deals closed on your watch, and do not accept that is just our policy as the last word. A worker in Pittsburgh, Philadelphia, or anywhere in New Jersey can ask an employment lawyer whether that pay is recoverable.
Frequently Asked Questions
Are commissions considered wages in Pennsylvania?
Earned commissions can be treated as wages under Pennsylvania’s Wage Payment and Collection Law, depending on the facts and the plan. The key is often whether the commission was earned for work already performed.
Can my employer refuse commissions because I quit?
Not necessarily. A policy that withholds commissions already earned may not be enforceable simply because you resigned, though the plan language and timing matter.
What is an active-employee clause?
It is a plan provision conditioning payment on still being employed when commissions are paid. Its enforceability can depend on state law and when the commission was earned.
How long do I have to pursue unpaid wages?
Deadlines vary by law and state, so it is wise to act promptly and seek advice rather than assume a particular window.
About the Author
This article was written by Andrew Lacy, founder of The Lacy Employment Law Firm, which represents employees in Philadelphia, Pittsburgh, and New Jersey. Andrew is a graduate of Cornell Law School and clerked for the Honorable Cathy Bissoon of the United States District Court for the Western District of Pennsylvania. He began his career representing management, and he now uses that insight on behalf of employees. He is admitted to practice in Pennsylvania and New Jersey, serves as President of the Eastern Pennsylvania Chapter of the National Employment Lawyers Association, and has been a guest speaker at Cornell Law School.
This post describes composite scenarios drawn from patterns we see across Pennsylvania and New Jersey workplaces; identifying details have been changed, and it does not depict any single client or case. It is provided for general educational purposes only and is not legal advice, and reading it does not create an attorney-client relationship. Employment rights vary by jurisdiction and by the specific facts involved. Prior results do not guarantee a similar outcome.
