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COA: Commissions do not qualify as wages under Wage Payment Statute

April 11, 2016

The Indiana Court of Appeals found commissions paid to a woman who was working as a salesperson at a furniture store did not qualify as wages, and therefore granted summary judgment to the store. The woman claimed her commission payments were not paid within the 10-day time frame required under the Indiana Wage Payment Statute.

 Dorothea Bragg worked at Kittle’s Home Furnishings from November of 2011 to September of 2013 as a salesperson. In June 2014, she filed a lawsuit on behalf of herself and a class of unknown current and former Kittle’s employees, alleging Kittle’s did not pay its employees within the 10-day limit set forth in the Indiana Wage Payment Statute. Kittle’s filed a motion to dismiss, saying the unknown class had not filed with the Department of Labor first. Later the trial court converted the motion into a motion for summary judgment. The trial court dismissed the unknown class for lack of subject matter jurisdiction and granted the motion for summary judgment in favor of Kittle’s.

The COA agreed with the trial court in dismissing the case of the unknown class members for lack of subject matter jurisdiction as they did not file a claim with the Department of Labor first. Also, the COA said the trial court did not abuse its discretion in denying discovery requests made by Bragg, as she failed to point to any information she would have gained had the court granted her requests.

The COA also said Bragg’s commission payments were not subject to the Indiana Wage Payment Statute. The commission Bragg made was not directly linked to the amount of work performed by her, the COA said, but was contingent on numerous factors over which Bragg had no control. The commission was not paid on a regular basis, only when earned. The definition of wages says pay needs to be regular and related to the amount of work performed.

The case is Dorothea Bragg, on behalf of herself and all others similarly situated v. Kittle’s Home Furnishings Inc., 49A02-1506-PL-653.


 

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