Effective October 16, 2007, Employers Need Written Agreements for Commissioned Salespersons.

Most employers use written agreements or policies for their commissioned sales employees. However, until recently, New York State Labor Law did not require a written agreement for employees who are commissioned salespersons.

Effective October 16, 2007, section 191(c) of the Labor Law will require that the terms of employment for commission salespersons be in a written agreement, signed by both the employer and the employee.

The amendment also impacts employer record keeping because it requires the employer to keep the agreement for at least three years and make it available to the NYSDOL upon request.

Under the new section 191(c), the written agreement must include a description of "how wages, salary, drawing account, commissions, and all other monies earned shall be calculated" and paid. If the agreement provides for a recoverable draw, then it also must state the frequency of reconciliation. Additionally, it must state the method for paying "wages, salary, drawing account, commissions and all other monies earned and payable" upon termination or resignation of the employee.

This law has teeth. If an employer fails to follow these requirements, the law presumes, in the absence of a written agreement, that the employee's statement of the terms and conditions of his/her commission agreement is correct. This means that an employer will have to overcome this presumption in any litigation over termination of employment and commissions.

New York employers are urged to review their commission and employment policies and agreements. If you have commissioned salespersons, you should have a written agreement with each of them. These agreements should be signed by all parties and state all of the terms required by the amended statute.

If you would like further information regarding this or any other legal issue, please contact your ChamberlainD’Amanda attorney.
*This legal news item serves as a summary of New York State Labor Law and may not be used as a substitute for legal advice.

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ChamberlainD’Amanda is a full-service law firm, serving the needs of individuals, businesses and labor unions in Rochester and Syracuse. With a 125-year tradition of practicing law, the firm takes a non-traditional approach, assigning each client a diverse team of legal experts. A staff of more than 30 attorneys is large enough to offer breadth and depth and small enough to treat each and every client as an individual.