Jill Chasson Examines Arizona Federal Court Ruling on Commission Forfeiture in HR Laws

Commission agreements often require workers to be actively employed on their payout date to receive commissions, putting earned pay at risk if an employee departs before then. In the April issue of HR Laws, Partner Jill Chasson explored a new Arizona federal court decision that casts doubt on whether those provisions are sustainable long term for local employers. In her article, Jill analyzed a case involving a mortgage loan originator who resigned before certain commissions were paid, even though the loans had already closed. The court determined the employee could not recover the payment under Arizona’s wage statute, yet still found the forfeiture provision unconscionable under Arizona contract law. This decision confirmed that employers cannot withhold commissions once the work to earn them is complete and...

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