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Sales Commissions

There are many matters pertaining to sales commissions that if you find a New York attorney, you can understand more clearly. New York state law defines commission as "compensation based on a percentage of or some other amount based upon a salesperson's orders or sales." Under the Fair Labor Standards Act (FLSA), employees covered by the Act who are paid on commission must be paid at least the minimum hourly wage and overtime for work in excess of 40 hours, unless they are exempt. Certain employees of retail and service establishments who are paid on a commission basis in whole or part are exempt from overtime pay regulations. To be exempt, these employees must earn a regular rate of pay that exceeds 1½ times the applicable minimum wage for every hour worked in a workweek; and more than half their total earnings in an average pay period must consist of commissions on goods or services. The FLSA exempts certain securities industry brokers from overtime rules. Outside salespeople who work on commission are exempt from both minimum wage and overtime rules.

If you are a commission salesperson, the New York Labor Law requires your employment agreement to be in writing and signed by both you and your employer. This law applies to an independent contractor as well as an employee. It can be worth your time to find a New York attorney to speak to about this. The employment agreement must include the following:

  • A description of how wages, salary, drawing accounts, commissions, and all other monies earned and payable will be calculated;
  • How often you will be paid;
  • The frequency of reconciliation (if the agreement provides for a revocable draw);
  • Any details relevant to the payment of wages, salary, drawing accounts, commissions, and all other monies earned and payable when the employment relationship ends.


How do I know if I am receiving the commission I am owed?

I think I am not receiving my commissions

How do I find a New York attorney to help with this?

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