Nothing on this page is advice about your job, and no article can be. If you want your own facts looked at, a Minnesota employment attorney can do that — and several of the deadlines described on this site are short enough that waiting is itself a decision.
In this guide
- The definition is the whole page
- The three deadlines, and the audit window
- The penalty is the unpaid amount, twice over at the ceiling
- When the amount is genuinely disputed
- What is “earned,” and what survives the last day
- Who counts as the salesperson, and who has to be paying
- Two clocks, and which claim sits on which
- Where the enforcement section sits
- Currency
- What this page does not do
The definition is the whole page
Search for a Minnesota commission statute and you will land on Minn. Stat. § 181.145, which promises payment in three working days, a stiff daily penalty, and attorney fees. Read its first subdivision before you rely on it:
For the purposes of this section, “commission salesperson” means a person who is paid on the basis of commissions for sales and who is not covered by sections 181.13 and 181.14 because the person is an independent contractor. For the purposes of this section, the phrase “commissions earned through the last day of employment” means commissions due for services or merchandise which have actually been delivered to and accepted by the customer by the final day of the salesperson’s employment.
The section defines its own beneficiary by subtraction. A commission salesperson is someone the other two sections do not reach, and the stated reason is that the person “is an independent contractor.”
The claim: "Minnesota law says my employer had three days to pay my commissions after they fired me."
That deadline is in a statute written for people who are not employees. Minn. Stat. § 181.145, subd. 1, defines "commission salesperson" as a person "who is not covered by sections 181.13 and 181.14 because the person is an independent contractor." A W-2 employee paid on commission is covered by §§ 181.13 and 181.14 — those sections reach "the wages or commissions actually earned and unpaid," in those words — and is therefore outside § 181.145's definition. The Minnesota Court of Appeals said so directly in Holman v. CPT Corp., 457 N.W.2d 740, 742–43 (Minn. Ct. App. 1990): "Section 181.145 is only applicable to situations where section 181.13 is not applicable; i.e., where disputed commissions are owed an independent contractor, not an employee." The three-working-day clock, the one-fifteenth daily penalty, and the fee provision are all in the section an employee cannot use. One Court of Appeals decision reads the other way on its face, and it did not decide the question: Hovelson v. U.S. Swim & Fitness, Inc., 450 N.W.2d 137, 140–41 (Minn. Ct. App. 1990), review denied (Minn. Mar. 16, 1990), cited §§ 181.13 and 181.145 together, in a default-judgment appeal in which no one raised subdivision 1 — and Holman cited Hovelson six months later and held as it did anyway. Holman, 457 N.W.2d at 743.
The Minnesota Supreme Court described the split the same way in Anderson v. Medtronic, Inc., 382 N.W.2d 512, 516–17 (Minn. 1986), when an employee argued the difference denied him equal protection: “Section 181.145 is similar to section 181.14, except that it only applies to ‘commission salespersons.’” The court upheld the distinction, at 517: “The legal relationship of an employer and an independent contractor differs from that of an employer and a salaried employee. We can perceive no valid reason why the legislature could not legislate different conditions for regulating prompt payment of compensation for the respective members of two different groups.”
| Independent contractor paid on commission | Employee paid on commission | |
|---|---|---|
| Governing section | § 181.145 | § 181.13 (discharged) or § 181.14 (quit) |
| When payment is due | 3 working days on demand if terminated or resigned with 5 days’ written notice; 6 working days if resigned without | Immediately on written demand (discharged); first regularly scheduled payday, with a stretch (quit) |
| Audit window if entrusted with money or property | 10 working days | 10 calendar days |
| Penalty | 1/15 of unpaid commissions per day, up to 15 days | average daily earnings per day, up to 15 days |
| Attorney fees | § 181.145, subd. 4(b), on adjudication of a disputed amount; § 181.171, subd. 1, lists § 181.145, so subd. 3 reaches it | § 181.171, subd. 3, mandatory on a finding of violation |
| What “earned” means | defined in subd. 1 — delivered to and accepted by the customer | not defined for commissions; since Laws 2013, ch. 27, “actually earned and unpaid” is defined only by reference to time worked at a rate, § 181.13(a) |
The mechanics of §§ 181.13 and 181.14 — the writing requirement, the 24-hour default, the 15-day penalty, and the deduction bar in § 181.79 — are set out in the guide on your last paycheck. This page does not repeat them.
The three deadlines, and the audit window
Subdivision 2(a) states the general duty: on termination or resignation of a commission salesperson, “the employer shall promptly pay the salesperson, at the usual place of payment, commissions earned through the last day of employment or be liable to the salesperson for the penalty provided under subdivision 3 in addition to any earned commissions,” unless the salesperson asks that payment be mailed — in which case “the commissions shall be deemed to have been paid as of the date of their postmark.”
Then the two clocks:
- (b) “If the employer terminates the salesperson or if the salesperson resigns giving at least five days’ written notice, the employer shall pay the salesperson’s commissions earned through the last day of employment on demand no later than three working days after the salesperson’s last day of work.”
- (c) “If the salesperson resigns without giving at least five days’ written notice, the employer shall pay the salesperson’s commissions earned through the last day of employment on demand no later than six working days after the salesperson’s last day of work.”
Both are working days, in the statute’s own word, and both are conditioned on demand. Five days’ written notice on the way out doubles the speed of the clock on the way back.
Subdivision 2(d) is the exception that swallows the schedule for anyone who handled money:
Notwithstanding the provisions of paragraphs (b) and (c), if the terminated or resigning salesperson was, during employment, entrusted with the collection, disbursement, or handling of money or property, the employer has ten working days after the termination of employment to audit and adjust the accounts of the salesperson before the salesperson can demand commissions earned through the last day of employment. In such cases, the penalty provided in subdivision 3 shall apply only from the date of demand made after the expiration of the ten working day audit period.
The window is time to determine what is owed. It is not authority to keep it.
The penalty is the unpaid amount, twice over at the ceiling
Subdivision 3 sets a per-day penalty “for each day, not exceeding 15 days, which the employer is late in making full payment or satisfactory settlement,” and then fixes the daily figure: “The daily penalty shall be in an amount equal to 1/15 of the salesperson’s commissions earned through the last day of employment which are still unpaid at the time that the penalty will be assessed.”
Fifteen days times one-fifteenth is one. At the ceiling the penalty equals the unpaid commissions, and it is owed “in addition to earned commissions” — so an employer fifteen days late on $20,000 owes $40,000. That arithmetic is the statute’s, not a court’s.
The claim: "We'll cut the commission check as soon as you sign the release."
A Minnesota court has held that does not comply with the statute. In Dougan v. Niedermaier, Inc., 419 N.W.2d 112 (Minn. Ct. App. 1988), review denied (Minn. Apr. 15, 1988), the employer's controller told a departed sales representative that the company owed him $9,306.45 and "would not be paid unless he released respondent from all claims for further commissions." Id. at 113. He refused, sued, and was awarded exactly the sum the employer had offered — and the trial court gave him no penalty and no fees. The Court of Appeals reversed that, at 115: "Respondent's offer of $9,306.45, contingent upon appellant's release of further claims of commissions, as a matter of law does not comply with the provisions in Minn.Stat. § 181.145." The court also held that the resulting noncompliance made him the prevailing party and entitled him to attorney fees under subdivision 4(b), and remanded for calculation of the penalty. Id. at 115.
When the amount is genuinely disputed
Subdivision 4(a) gives the employer a way out of the penalty, and one way back in:
When there is a dispute concerning the amount of the salesperson’s commissions earned through the last day of employment or whether the employer has properly audited and adjusted the salesperson’s account, the penalty provided in subdivision 3 shall not apply if the employer pays the amount it in good faith believes is owed the salesperson for commissions earned through the last day of employment within the applicable period as provided under subdivision 2; except that, if the dispute is later adjudicated and it is determined that the salesperson’s commissions earned through the last day of employment were greater than the amount paid by the employer, the penalty provided in subdivision 3 shall apply.
Read the two halves together. Paying the good-faith figure on time suspends the penalty. Being wrong about the figure, once a court says so, revives it — the statute does not condition that revival on bad faith.
Subdivision 4(b) is the fee clause: “If a dispute under this subdivision is later adjudicated and it is determined that the salesperson was not promptly paid commissions earned through the last day of employment as provided under subdivision 2, the employer shall pay reasonable attorney’s fees incurred by the salesperson.”
What is “earned,” and what survives the last day
For a commission salesperson the statute answers the question itself. Subdivision 1: “commissions earned through the last day of employment” are “commissions due for services or merchandise which have actually been delivered to and accepted by the customer by the final day of the salesperson’s employment.” Delivery and acceptance, both, by the last day.
That does not extinguish the rest. Subdivision 5:
Nothing in this section shall be construed to impair a commission salesperson from collecting commissions on merchandise ordered prior to the last day of employment but delivered and accepted after termination of employment. However, the penalties prescribed in subdivision 3 apply only with respect to the payment of commissions earned through the last day of employment.
The pipeline is still collectible. The statutory penalty simply does not extend to it.
The claim: "My commission was earned the day the customer signed, so § 181.145's clock covers it."
The statute uses a later moment, and a court has refused to import that moment into the employee statute. Section 181.145, subd. 1, ties "commissions earned through the last day of employment" to merchandise or services "actually been delivered to and accepted by the customer by the final day." An order signed but undelivered is outside that phrase — though subdivision 5 preserves the right to collect on it later, without the penalty. For an employee, the answer is not this statute at all. In Holman v. CPT Corp., 457 N.W.2d 740, 743 (Minn. Ct. App. 1990), the trial court had used § 181.145's definition to decide whether an employee's commissions were "actually earned" under § 181.13, and the Court of Appeals reversed: "It was error for the trial court to superimpose the statutory provisions relating to independent contractors upon the statutory provisions relating to employees." Because "the term 'actually earned' is not defined by statute, the terms of CPT's own compensation plan may be considered in determining whether Holman had earned the Mayo commissions," and the question was one of fact. Holman, 457 N.W.2d at 743.
One currency note on that last point. Laws 2013, ch. 27, § 1, added a sentence to § 181.13(a): “Wages are actually earned and unpaid if the employee was not paid for all time worked at the employee’s regular rate of pay or at the rate required by law, including any applicable statute, regulation, rule, ordinance, government resolution or policy, contract, or other legal authority, whichever rate of pay is greater.” On its face that sentence addresses time worked at a rate, not a commission. What it does to Holman’s reasoning is a question no case cited on this page answers, and this page does not answer it either.
One more section reaches an employee’s commissions after the job ends, and it is not in chapter 181’s payment sections at all. Minn. Stat. § 181.03, subd. 2 provides that, “[e]xcept as otherwise provided in section 181.13, an employer or a person, firm, corporation, or association may not alter the method of payment, timing of payment, or procedures for payment of commissions earned through the last day of employment after the employee has resigned or been terminated if the result is to delay or reduce the amount of payment.” Subdivision 3 supplies the remedy: an employer who violates the section “is liable in a civil action brought by the employee for twice the amount in dispute.” Both are enforceable through § 181.171 and through a commissioner’s compliance order under § 177.27, subd. 4.
Who counts as the salesperson, and who has to be paying
Two Court of Appeals decisions fill in the edges of subdivision 1.
A corporation can be the salesperson. In McClure v. Davis Engineering, L.L.C., 716 N.W.2d 354 (Minn. Ct. App. 2006), a manufacturers’ representative operating as a subchapter-S corporation sued for penalties and fees, and the district court held a corporation cannot be a “person” under § 181.145. The Court of Appeals disagreed, at 357: “On its face, section 181.145, subdivision 1, does not limit the term ‘person’ to natural persons,” and with Minn. Stat. § 645.44, subd. 7’s general definition applied, “the term ‘person’ in section 181.145, subdivision 1, includes a corporation.” The court expressly declined to follow a federal district court decision from Kansas that had predicted the opposite under Minnesota law, because rules of construction apply only to ambiguous statutes and this one is not ambiguous. McClure, 716 N.W.2d at 358.
The commissions have to come from the party you are suing. In Midwest Sports Marketing, Inc. v. Hillerich & Bradsby of Canada, Ltd., 552 N.W.2d 254 (Minn. Ct. App. 1996), review denied (Minn. Sept. 20, 1996), individuals argued they were commission salespersons of a manufacturer even though the manufacturer had never paid them commissions — their pay came from the marketing company they worked through. The court rejected it at 262: “Implicit throughout the statute is the notion that the salesperson is paid by the principal on the basis of commissions.”
Two clocks, and which claim sits on which
McClure is also the case that separates the limitations periods, and the separation matters more than the deadline itself.
The statutory claim — penalties and attorney fees under § 181.145 — runs on Minn. Stat. § 541.07(5). McClure, 716 N.W.2d at 358. That clause covers actions “for the recovery of wages or overtime or damages, fees, or penalties accruing under any federal or state law respecting the payment of wages or overtime or damages, fees, or penalties,” within two years, “except, that if the employer fails to submit payroll records by a specified date upon request of the Department of Labor and Industry or if the nonpayment is willful and not the result of mistake or inadvertence, the limitation is three years.”
The contract claim — suing for the commission itself — is different when the claimant was never an employee. Section 541.07(5) carries its own parenthetical definitions: “wages” means remuneration “where the relationship of master and servant exists,” and “damages” means statutory single, double, or treble damages. Applying both, McClure held at 359: “It is clear that McClure Associates is not seeking to recover wages, as defined in section 541.07(5), because there was never a master-and-servant relationship between Douglas Machine and McClure Associates. And because McClure Associates’ breach-of-contract claim is not a statutory cause of action, we conclude that the statute of limitations in section 541.07(5) is inapplicable here.” The claim went instead to the six-year period in Minn. Stat. § 541.05, subd. 1(1), for an action “upon a contract or other obligation, express or implied, as to which no other limitation is expressly prescribed.” McClure, 716 N.W.2d at 359.
On accrual, the court applied the ordinary contract rule — “a cause of action for breach of contract accrues on the breach of the terms of the contract,” McClure, 716 N.W.2d at 359 (quoting Levin v. C.O.M.B. Co., 441 N.W.2d 801, 803 (Minn. 1989)) — and found the claim accrued when payment came due under the parties’ agreement, on the manufacturer’s receipt of the customer’s payment. McClure, 716 N.W.2d at 359. As to when a § 181.145 claim accrues, the court remanded rather than deciding: it sent the case back “for a determination of whether the relationship between McClure Associates and Douglas Machine could be terminated for the purposes of McClure Associates’ claim under section 181.145 and, if so, when such termination occurred.” Id. at 358. That question was left open.
Where the enforcement section sits
Section 181.171, subd. 1, authorizes a civil action “directly to district court” for violations of an enumerated list of sections, and § 181.145 is on it, alongside §§ 181.13 and 181.14. Subdivision 3 then makes the fee award mandatory: “In an action brought under subdivision 1, the court shall order an employer who is found to have committed a violation to pay to the aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.”
One detail worth noticing, because it is the kind of thing that gets assumed. Section 181.171, subd. 4, defines “Employer” as “any person having one or more employees in Minnesota” and then names the sections that definition governs: “this section and sections 181.02, 181.03, 181.031, 181.032, 181.06, 181.063, 181.10, 181.101, 181.13, 181.14, and 181.16.” Section 181.145 is not in that list, even though it is in the subdivision 1 list. Section 181.145 supplies its own subject — “any person, firm, company, association, or corporation employing a commission salesperson in this state.” § 181.145, subd. 2(a).
For employees, § 181.171’s mandatory fee award is comparatively new. When the Minnesota Supreme Court decided Anderson v. Medtronic in 1986, it held that the phrase “cost of such suit” in the then-current § 181.14 meant “all out-of-pocket expenses reasonably incurred in prosecuting or defending the action not including attorney fees.” Anderson, 382 N.W.2d at 516. Section 181.171 was enacted ten years later, in Laws 1996, ch. 386, § 12, and the mandatory fee provision was in it from the start — subdivision 3 of the new section, in the enacting act’s own inserted text. The same act’s subdivision 1 listed § 181.145 among the sections a private party could sue on, as it still does. The commission-salesperson fee clause in § 181.145, subd. 4(b), is older than either: it has been in the section since Laws 1984, ch. 446, § 3, and nothing has amended it since.
Currency
Section 181.145’s History line reads in full: “1984 c 446 s 3; 1986 c 444.” The second of those is the revisor’s 1986 gender-neutral-language act. Revisor Table 2, queried for the exact section, returns “No Records Found” for every session from 1994 to the present, for both the 2025 and the 2026 tables. The section has not been touched since it was written. Every deadline, the one-fifteenth penalty, and the fee clause are as enacted in 1984.
What this page does not do
This page reads a statute and six decisions that construe it or sit next to it. It does not decide whether a particular arrangement made someone an employee or an independent contractor — which is the threshold question here and is not answered by what the contract called the relationship. That classification question is treated separately in the guide on being misclassified as a contractor, and it has different tests for different purposes.
What is general: check subdivision 1 before you rely on subdivision 2, notice that the fast clocks and the fee clause belong to the independent contractor, and notice that an employee’s route runs through §§ 181.13 and 181.14, with their own writing requirement and their own penalty, and through § 181.03, subd. 2, if the employer changed how commissions were paid after the job ended.
Related: your last paycheck, misclassified as a contractor, and every Minnesota employment deadline in one table.
Common questions
- Who is a "commission salesperson" under Minn. Stat. § 181.145?
- Subdivision 1 defines the term by exclusion: "'commission salesperson' means a person who is paid on the basis of commissions for sales and who is not covered by sections 181.13 and 181.14 because the person is an independent contractor." Both halves are required — paid on commissions, and an independent contractor rather than an employee. The Minnesota Court of Appeals has held that "person" in that subdivision includes a corporation. McClure v. Davis Engineering, L.L.C., 716 N.W.2d 354, 357 (Minn. Ct. App. 2006).
- How fast must commissions be paid after a Minnesota commission salesperson is terminated?
- Minn. Stat. § 181.145, subd. 2(b), requires the employer to pay commissions earned through the last day of employment "on demand no later than three working days after the salesperson's last day of work" where the employer terminated the salesperson or the salesperson resigned giving at least five days' written notice. Subdivision 2(c) allows six working days where the salesperson resigned without giving at least five days' written notice. Subdivision 2(d) gives the employer ten working days to audit and adjust the accounts of a salesperson who was entrusted with the collection, disbursement, or handling of money or property, and in that case the penalty runs only from a demand made after the ten-day audit period.
- What is the penalty for late payment of commissions in Minnesota?
- Minn. Stat. § 181.145, subd. 3, sets a daily penalty "for each day, not exceeding 15 days, which the employer is late in making full payment or satisfactory settlement," and fixes its size: "The daily penalty shall be in an amount equal to 1/15 of the salesperson's commissions earned through the last day of employment which are still unpaid at the time that the penalty will be assessed." Fifteen days at one-fifteenth each is the whole unpaid amount, so the maximum penalty equals the unpaid commissions. It is in addition to the commissions themselves.
- Can an employer make me sign a release to get my commissions?
- The Minnesota Court of Appeals has held that a conditional offer of that kind does not satisfy the statute. In Dougan v. Niedermaier, Inc., 419 N.W.2d 112, 115 (Minn. Ct. App. 1988), review denied (Minn. Apr. 15, 1988), the employer offered the full amount it calculated as due but conditioned payment on the salesperson releasing all further commission claims. The court held: "Respondent's offer of $9,306.45, contingent upon appellant's release of further claims of commissions, as a matter of law does not comply with the provisions in Minn.Stat. § 181.145." The employer was held liable for the penalty and for the salesperson's attorney fees.
- How long do I have to sue for unpaid commissions in Minnesota?
- It depends on which claim. In McClure v. Davis Engineering, L.L.C., 716 N.W.2d 354, 358 (Minn. Ct. App. 2006), the court held that a claim "for penalties and attorney fees under section 181.145 is governed by the statute of limitations in Minn.Stat. § 541.07(5)," the two-year wage-and-penalty period, extended to three years in the two situations that clause names. But the same court held at 359 that a plain breach-of-contract claim for the commission itself, brought by someone who was never in a master-and-servant relationship with the payer, falls under the six-year period in Minn. Stat. § 541.05, subd. 1(1), because such a claimant "is not seeking to recover wages, as defined in section 541.07(5)," and the contract claim "is not a statutory cause of action."
Sources checked September 10, 2026. Citations independently verified against the primary source September 10, 2026. Updated September 11, 2026.
- Minn. Stat. § 181.145 (payment to commission salespeople) — Minnesota Office of the Revisor of Statutes
- Minn. Stat. § 181.13 (penalty for failure to pay wages promptly) — Minnesota Office of the Revisor of Statutes
- Minn. Stat. § 181.14 (payment to employees who quit or resign; settlement of disputes) — Minnesota Office of the Revisor of Statutes
- Minn. Stat. § 181.171 (private party civil actions) — Minnesota Office of the Revisor of Statutes
- Minn. Stat. § 541.07 (two- or three-year limitations) — Minnesota Office of the Revisor of Statutes
- Minn. Stat. § 541.05 (various cases, six years) — Minnesota Office of the Revisor of Statutes
- McClure v. Davis Engineering, L.L.C., 716 N.W.2d 354 (Minn. Ct. App. 2006) — Caselaw Access Project
- Holman v. CPT Corp., 457 N.W.2d 740 (Minn. Ct. App. 1990) — Caselaw Access Project
- Dougan v. Niedermaier, Inc., 419 N.W.2d 112 (Minn. Ct. App. 1988) — Caselaw Access Project
- Anderson v. Medtronic, Inc., 382 N.W.2d 512 (Minn. 1986) — Caselaw Access Project
- Midwest Sports Marketing, Inc. v. Hillerich & Bradsby of Canada, Ltd., 552 N.W.2d 254 (Minn. Ct. App. 1996) — Caselaw Access Project
- Hovelson v. U.S. Swim & Fitness, Inc., 450 N.W.2d 137 (Minn. Ct. App. 1990) — Caselaw Access Project
- Minn. Stat. § 181.03 (certain acts relating to payment of wages unlawful) — Minnesota Office of the Revisor of Statutes