This article addresses the following issues:
Yes. As an independent contractor sales representative in New York, you are entitled to your unpaid commissions.
A commission is compensation based on a percentage of the dollar amount of a salesperson’s orders or sales. These wages are commissions regardless of whether the salesperson sells securities, goods, wares, merchandise, services, real estate, insurance, or anything else.
In New York, When a Principal Does Not Pay, to an Independent Contractor Sales Representative, the Commissions That the Sales Representative Has Earned, What Are the Sales Representative’s Rights?
In New York, an independent contractor sales representative’s pay agreement must be in writing. The principal must provide the independent contractor sales representative with a signed copy of the contract. The commission agreement must include a description of how commissions will be computed and the method by which the independent contractor sales representative will be paid.
There is a six-year statute of limitations for an independent contractor sales representative to recover unpaid commissions in New York.
In New York, if an independent contractor sales representative wins a lawsuit for unpaid or underpaid commissions, he or she is entitled not only to the amount of unpaid or underpaid commissions, but also to additional damages equal to 100% of the unpaid or underpaid commissions, interest at the 9% statutory interest rate, and reasonable attorney’s fees, court costs, and disbursements.
When a contract between a principal and a sales representative is terminated, all earned commissions must be paid within five business days after termination or within five business days after they become owing in the case of commissions not yet owed when the contract is terminated.
The earned commission must be paid to the independent contractor sales representative at the usual place of payment unless the sales representative asks that the commission be sent to him or her through the mail. If the commissions are sent to the sales representative by mail, the earned commissions are considered to have been paid as of the date of their postmark.
In my experience, there are several recurring reasons that unpaid commissions disputes occur.
The most common reason is that the independent contractor sales representative originates a sale and the sale has not been entirely consummated at the time that the sales representative is fired. A dispute arises, between the principal and the sales representative, as to whether the commission was earned at the time of the termination. Typically, the principal asserts that the commission was not earned and thus is not payable upon termination of the working relationship. The sales representative maintains that the commission was earned.
Principals also often miscalculate commissions earned under contractual formulas. Principals may argue, without merit, that the terms of the commission agreement give them broad discretion to deviate downward from the agreement’s formula for computing the sales representative’s commissions. Further, brokerage firms may unlawfully withhold payment of commissions because of pending or possible customer complaints against the sales representative or because of pending or potential regulatory investigations arising from the sales representative’s actions. All of these bases for withholding or underpaying commissions are unlawful.
Attorney David S. Rich is a knowledgeable, diligent New York City Unpaid Commissions Attorney. For over 25 years, he’s helped clients just like you understand and enforce their rights as independent contractor sales representatives.
If you are an executive, a professional, a commissioned salesperson, or an independent contractor sales representative in the New York City metro area and you believe you’ve been denied commissions, bonuses, salary, or other wages that are owed to you, call New York City Unpaid Commissions Lawyer David S. Rich at (347) 603-1143 today.
Independent contractor sales representatives are typically hired by manufacturers, distributors and importers to solicit orders for their products from prospective customers in selected territories in exchange for a sales commission.
As a sales representative, you have likely spent many months or years building up a customer base in your assigned territory. Likewise, you have likely incurred substantial up-front sales and marketing expenses that may include travel, lodging, entertainment, and trade show expenses with the hope of generating a stream of future commission income.
As an independent contractor sales representative, you are vulnerable if your principal suddenly terminates your relationship and/or fails to pay all commissions owed to you.
To remedy these problems, starting in the 1980s and 1990s, thirty-five of the fifty states passed statutes to protect the rights of independent contractor sales representatives.
These state statutes often:
Preclude the principal from imposing terms (such as choice of law provisions or exclusive forum provisions) in the sales representative agreement that would, in practice, compel the sales representative to waive his or her statutory protections under the law.
New York is one of the 35 states that statutorily protect independent contractor sales representatives’ rights.
If you are an executive, a professional, a commissioned salesperson, or an independent contractor sales representative in the New York City metropolitan area and you believe you’ve been denied commissions, bonuses, salary, or other compensation that is owed to you, call New York City Unpaid Commissions Attorney David S. Rich at (347) 603-1143 today.
Attorney David S. Rich is a knowledgeable, diligent New York City Unpaid Commissions Attorney. For over 25 years, he’s helped clients just like you understand and enforce their rights as independent contractor sales representatives.
If you are an executive, a professional, a commissioned salesperson, or an independent contractor sales representative in the New York City metro area and you believe you’ve been denied commissions, bonuses, salary, or other wages that are owed to you, call New York City Unpaid Commissions Lawyer David S. Rich at (347) 603-1143 today.