• In most states, company policy and the timeframe wages or pay can be calculated direct how employers handle earned but unused vacation time, commission wages, and bonuses of terminated employees.

Employees commonly believe that people must be given payment for any earned but unused vacation time upon separation of employment. In most states, however, the payout of earned vacation time is entirely at the employer’s discretion, subject only to company policy. A handful of states, however, consider earned but unused vacation to be a “wage” that must be paid out to departing employees.

In some instances, commission wages cannot be determined at the time of a sale and must be calculated based on later developments (e.g., receipt of payment, shipping of product, or delays to allow for customer returns). In that case, commission wages become due and payable when the wages are reasonably calculable, even if the employment relationship ended before those conditions were satisfied.

Bonuses are sometimes confused with commission wages. Bonuses are not based on the price of a product or service, but are usually based on reaching some established criteria. Many times, a bonus is paid to individuals who are not engaged in sales at all.