Representing Employees Who Were Denied Their Rightful Commissions in New York City
Many people in New York work as salespeople in various fields and they rely on commission payments for a significant part of their earnings. Commission is a common form of compensation for many types of salespeople, including those selling real estate, securities, goods, or any other type of service or product. Fair commission agreements benefit both employers and employees, because they provide incentives for greater sales, which result in more earnings for salespeople and increased profits for businesses.
Unfortunately, employers do not always follow commission agreements as expected. A company may make certain promises regarding commission payments and then—for whatever reason—fail to properly pay them. In this situation, both New York labor laws and federal laws provide the right for unpaid employees to take certain legal actions.
Even when an employee’s compensation arrangement is relatively straightforward, complicated wage laws can make understanding your rights challenging. This only becomes more complex with additional types of compensation, such as commissions. If you believe that your employer failed to pay you all of the commission that you deserve, never hesitate to discuss the matter with a highly skilled New York wage and employment attorney.
Braverman Law PC can protect your rights, so please contact us today for a free consultation to learn more today.
New York Commission Requirements
Commission is not a set amount of compensation like an hourly wage or an annual salary. Instead, commission is usually calculated as a percentage of a person’s sales contracts or orders, or as a set amount per contract or order. Commissioned salespersons may be employees of the company or independent contractors, and New York law protects the rights of both to proper payment.
State labor law requires that companies and salespeople—both employees and independent contractors conducting sales—memorialize all commission agreements in writing. The agreement must address specific terms, and both the salesperson and the employer must sign it. Terms that commission agreements must include are:
- How the employer will calculate all payments—including salary, hourly wages, commissions, and draws
- When the salesperson may consider a commission earned
- How and when the employer will pay commission (and any other compensation) upon the termination of the employment agreement by either party
In addition, New York law requires employers to provide a detailed statement of all paid and unpaid earnings—including commissions—if the employee submits a request in writing.
Another complex requirement involves New York’s minimum wage and overtime requirement, which may or may not apply to commissioned employees. If someone is considered an outside salesperson, meaning they conduct their sales mostly away from the employer’s premises, both both federal and New York law exempt them from minimum wage and overtime requirements .
However, New York does provide minimum wage and overtime rights for commissioned employees who work from the employer’s office or location. In such cases, if the employee’s commissions do not satisfy minimum wage or overtime requirements based on the hours they worked, the employer will have to pay the employee the difference to comply with the law.
Your rights under New York labor laws depend closely on your specific employment situation, your employment agreement, and many other factors. If you suspect your employer violated your rights, hire an experienced wage and hour attorney to examine your situation as soon as possible.
Common Commission Violations
Despite labor laws and written employee agreements, employers commonly refuse to pay some or all of the commission earned by salespeople. Employers can violate commission requirements by:
- Miscalculating commissions
- Taking unlawful deductions from earned commissions
- Wrongfully withholding payments due to investigations or complaints regarding sales
- Delaying commission payments
- Requiring salespeople to repay future draws after employment agreements end
- Claiming commissions were not “earned” despite the terms of employment agreements or past dealings
- Failing to pay any earned commissions after terminating employment agreements
- Failing to meet minimum wage or overtime requirements when required by law
In any of these situations, commissioned employees have rights to seek their commissions and other compensation they earned.
Commission Claims in New York City
Unpaid commissioned employees have the right to file a cause of action against their employers for violating New York labor law and for breach of contract. While damages sought will depend on the specific circumstances of the case, they can include:
- Payment of all unpaid commissions
- Compensatory damages
- Attorney fees
The commissioned salespeople in New York who work on Wall Street may have to take a different course of action to obtain unpaid commissions—the law requires arbitration clauses in written employment agreements for many types of securities salespeople. If your agreement contains such a clause, you will need to pursue unpaid commissions through the arbitration process instead of directly through litigation.
Either way, hire an attorney who can determine the best course of action in your case based on your employment agreement and applicable laws. You also want a lawyer with experience handling both commission-related litigation and arbitration to best protect your rights.
Contact a New York Unpaid Commissions Law Firm for Help Today
New York’s extremely complicated commission laws can make it difficult to know for sure when your employer has violated your rights. If you suspect you were not paid the full amount you rightfully earned, you have nothing to lose by consulting with an experienced wage and hour attorney who can advise you of your rights under New York law.
Braverman Law PC represents the rights of employees to proper payment—and this includes commission. If you would like more information, please call (212) 206-8166 or contact us online to set up a consultation today.