Question: One of our commission-based employees returned from a two-month leave of absence due to pregnancy. She says she was denied wages owed under her commission plan, but she wasn’t actively working to earn the commissions. Do we have to pay her?
Answer: It depends on what the commission plan says and whether the company treats all eligible employees who take leave equally under your plan. If the plan says the employee is eligible and owed commission pay regardless of her leave of absence status, then the wages should be calculated and paid. If the plan disqualifies her for commissions based on leave status, the company should test whether that requirement triggers any discrimination concerns (i.e. is denying her the commission consistent with how other employees in the same situation are treated?). If you don’t have a written plan, or the plan doesn’t address leave, then review any documentation that may contain representations to the employee about commissions, such as an offer letter. As we’ve previously reported, verbal representations may also create a legal obligation to pay wages. To avoid disputes, any type of compensation program, plan, or agreement that provides for the payment of wages to an employee should be detailed in writing and reviewed by legal counsel before utilized.
Pregnancy discrimination and wage suit proceeds over unpaid maternity leave commissions
Recently, a Utah federal district court ruled that a former employee presented enough evidence to proceed with a lawsuit alleging that her former company violated wage and hour laws, and unlawfully discriminated against her based on her pregnancy in violation of Title VII of the Civil Rights Act of 1964. The employee alleged that her manager promised her that she would continue to receive commissions while on maternity leave, yet the company relied on its unpaid leave policy not to pay commissions. When the employee raised an internal wage complaint, the company agreed to pay her half of the commissions she would have otherwise earned. The court ruled that the employee had sufficient evidence to present her case to a jury showing that she was not treated as favorably as other employees on leave for non-pregnancy reasons (Evans v. Glymed Plus, LLC, D Utah, Jan. 2026).
Clear compensation agreements and consistent policy application minimize legal risk
If an employer fails to set clear expectations in advance and consistently apply the terms of a compensation plan, it will be difficult to successfully defend claims based on discrimination, breach of contract, and wage and hour law. Generally, a commission agreement or bonus plan should include the following information: (1) effective date and term of agreement/plan; (2) eligibility requirements; (3) conditions or quotas that must be met by employee to be entitled to payment; (4) formula for calculating payment; (5) timing of payment; and (6) forfeiture provisions. Management should regularly review the agreement and update it as necessary as laws and business needs change. Any change to an employee’s compensation package should be communicated with sufficient advance notice to the affected employee, providing them an opportunity to determine whether they want to perform work in exchange for the compensation offered.
For specific legal advice about your compensation structure or employee pay, members should contact their Vigilant Law Group employment attorney.
