Will I be Paid My Commissions if I Resign or am Terminated from My Employment?

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Commission word on a ball of hundred dollar bills earn money sales

A common question posed is: “Will I receive my commissions when I resign or am terminated from my employment?” The answer to this depends on (a) what your commission agreement states and (b) when the commission is concerned “earned.”

New York law requires that a commissioned salesperson’s pay must be in writing and signed by the employer and the salesperson. It must contain a description of how wages/ commissions / monies are calculated and considered earned; the frequency of when the salesperson will receive payment for the earned commission; the frequency of reconciliation, if applicable; and all details regarding what payments, if any, are to be made when the employment relationship ends and when the payment(s) will occur.

Upon written request of the salesperson, the employer must provide a detailed statement of earnings paid or due as well as those that remain unpaid.

When is the commission “earned”? This depends on what is written in the agreement. If the agreement is silent on this point, then it is deemed earned in accordance with past dealings between the employer and commissioned salesperson. If there are no past dealings to rely upon, then the commission is deemed earned when the salesperson produces someone ready, willing and able to enter into the contract upon the employer’s terms.

Once a commission is deemed “earned”, it is legally considered “wages” under the New York Labor Law.

All commissions that have been “earned” must be paid to an employee even if the employee has left employment. It does not matter if the employee has been terminated or resigns from employment.

If the commissions have not been earned at the time of termination or resignation, then the terms of the written agreement between the employee and employer will govern whether payment will be made and if so, when.

If you have left your employment, voluntarily or involuntarily, and believe you are owed commissions, contact Donath Law, LLC to determine your rights and options.