Commissioned New York City employees, including many Wall Street salespeople, rely on their commissions as an important part of their expected compensation. When employers unjustly delay or deny commissions or miscalculate the unpaid commission owed, they violate state and federal wage and hour laws. The best way to protect your interests as a commissioned employee is to consult an experienced attorney about your legal rights and options.
If your employer has accidentally or deliberately failed to pay you your commission, you’ve been unlawfully deprived of rightfully earned compensation. You may have a legal claim for unpaid commission and other damages. The experienced employment attorneys at Woods Lonergan routinely handle unpaid commission disputes in New York City. We are prepared to take legal action on behalf of commissioned employees to recover the compensation they deserve. Contact Woods Lonergan today to schedule your free initial consultation.
What Is an Unpaid Commission?
A commission is a type of compensation based on a percentage of the salesperson’s sales or orders. For many New York City employees, commissions make up a significant percentage of their annual compensation. Under New York law, a commissioned salesperson’s terms of employment must be in writing and signed by the employer and salesperson. Additionally, the employment agreement must include:
- How often the salesperson will be paid
- A detailed description of how wages, drawing accounts, salary, commissions, and all other earnings will be computed
- The frequency of reconciliation if the agreement provides for a recoverable draw
- Details pertinent to the payment of wages and commissions
Common Types of Commission Disputes
In some cases, employers miscalculate the amount of commission an employee has earned. The employer may claim that the employment agreement provides broad discretion to pay a lower commission than the agreed-upon formula. In other cases, New York brokerage firms may withhold commission payment unlawfully because of potential or pending customer complaints against the salesperson. Additionally, the employer may avoid paying a commission due to a pending regulatory investigation arising from the salesperson’s behavior.
We assist independent contractors and employees pursuing unpaid commissions in all of the following industries:
- Stock, bond derivative, options, currency, commodities, and futures traders
- Investment bankers
- Account executives
- Sales directors, executives, and representatives
- Senior vice presidents
- Managing directors
- Retail brokers
- Financial analysis, advisors, and research analysis
Litigation Attorneys in Unpaid Commission Disputes
In New York, there are statutory, contractual, and common law grounds on which a salesperson may be entitled to obtain unpaid or underpaid commissions. High-value commission disputes over unpaid commission frequently result in litigation. The skilled attorneys at Woods Lonergan have routinely represented clients in the financial services and investment banking industries seeking to recover unpaid commissions.
Protections for Independent Contractors Who Receive Commissions
Independent contractors can be deprived of many protections afforded to employees. Commissioned independent contractors do enjoy legal protection in New York. Companies that hire independent contractor salespeople must provide a written commission agreement.
Employers are legally required to pay all commissions within five days of the commission becoming due under the written agreement. If you are an independent contractor and your employer hasn’t paid you within five days of the due date, you may be entitled to your unpaid commission and additional damages.
New York Unpaid Commission Laws
The federal Fair Labor Standards Act doesn’t require or regulate the payment of commissions. However, New York state law closely regulates the compensation of commissioned employees. Under New York labor law, an employee has earned a commission under the terms of their contract. The commissions are legally indistinguishable from typical wages.
Employers can’t require any deductions from the commission beyond those authorized for other wages. An employee’s commissions must be paid to employees promptly on established regular paydays. Minimum wage and overtime laws apply to commissioned employees.
Employers cannot avoid paying employees a minimum wage or for overtime by claiming the employee didn’t earn enough of a commission. Depending on the employment agreement, an employee can be a commissioned or outside salesperson.
When Can Employers Take Deductions from Commission Payments
Employers can deduct commission advances from commission payments. They can also deduct draws against commissions, but only from the portion of the employee’s compensation that constitutes commissions. Employers can’t deduct draws or commission advances from an employee’s regular salary or wages. Many commission agreements require arbitration when disputes arise. The attorneys at Woods Lonergan have extensive experience representing clients in arbitration panels.
What Happens If My Employer Doesn’t Pay Me My Commission?
You can pursue damages when your employer fails to pay you the commission you are owed, or if your employer fails to follow the regulations set forth under New York employment law. You can hold your employer liable in a civil action for double the damages you incurred. For example, if your employer has failed to pay you $50,000 in commissions and you succeed in court, you would be entitled to an additional $50,000 for $100,000 in damages. You can also pursue reasonable attorney’s fees, court costs, and disbursements.
Unpaid Commission Claims When There Is No Written Agreement
What happens when a commissioned employee doesn’t have a written agreement that details their commission agreement? New York Labor Law creates a presumption that, when a written employment agreement doesn’t exist, the terms of the commission presented are the agreed-upon employment terms. As an employee, the court will presume that the terms related to your commission as you understood them are enforceable.
Reach Out to an Unpaid Commissions Attorney in New York
If you believe you have been wrongfully denied your commissions, you may be entitled to compensation through an employment law claim. As a commissioned employee, you have a right to the money you earn. The attorneys at Woods Lonergan will carefully review your claim and advise you of your legal rights. We have a proven track record of successfully obtaining the maximum damages possible in unpaid wage cases. Contact Woods Lonergan today to schedule your initial consultation.