Tuesday, April 25, 2017

COMMISSIONED SALESPERSONS - WRITING REQUIRED WHETHER EMPLOYEE OR INDEPENDENT CONTRACTOR


N.Y. Labor Law § 191(c) requires that agreements with commissioned sales workers be in writing and signed by the employer and the employee.

The statute provides:

"c. Commission salespersons.--A commission salesperson shall be paid the wages, salary, drawing account, commissions and all other monies earned or payable in accordance with the agreed terms of employment, but not less frequently than once in each month and not later than the last day of the month following the month in which they are earned;  provided, however, that if monthly or more frequent payment of wages, salary, drawing accounts or commissions are substantial, then additional compensation earned, including but not limited to extra or incentive earnings, bonuses and special payments, may be paid less frequently than once in each month, but in no event later than the time provided in the employment agreement or compensation plan.  The employer shall furnish a commission salesperson, upon written request, a statement of earnings paid or due and unpaid.  The agreed terms of employment shall be reduced to writing, signed by both the employer and the commission salesperson, kept on file by the employer for a period not less than three years and made available to the commissioner upon request.  Such writing shall include a description of how wages, salary, drawing account, commissions and all other monies earned and payable shall be calculated.  Where the writing provides for a recoverable draw, the frequency of reconciliation shall be included.  Such writing shall also provide details pertinent to payment of wages, salary, drawing account, commissions and all other monies earned and payable in the case of termination of employment by either party.  The failure of an employer to produce such written terms of employment, upon request of the commissioner, shall give rise to a presumption that the terms of employment that the commissioned salesperson has presented are the agreed terms of employment."

Also note for sales representatives who are not employees there is Labor Law 191-b:

"1. When a principal contracts with a sales representative to solicit wholesale orders within this state, the contract shall be in writing and shall set forth the method by which the commission is to be computed and paid.

2. The principal shall provide each sales representative with a signed copy of the contract.  The principal shall obtain a signed receipt for the contract from each sales representative.

3. A sales representative during the course of the contract, shall be paid the earned commission and all other monies earned or payable in accordance with the agreed terms of the contract, but not later than five business days after the commission has become earned."

Of course, the status of a sales representative as an independent contractor is a complex matter that depends on a number of factors.

See https://labor.ny.gov/legal/counsel/pdf/payment-of-commissions-frequently-asked-questions.pdf

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