Recently, New York Labor Law § 191 was amended to require employers of commissioned salespersons to provide a written employment agreement. Before this change, the Labor Law did not require that commissioned salespersons have written agreements. New York employers should therefore be aware of this recent amendment which may require them to alter their existing employment policies.
A commission salesperson is an employee whose principal activity is the selling of goods, services, real estate, securities or insurance and whose earnings are based in whole or in part on commissions. The amendment to New York Labor Law § 191(c) requires that the written agreement describe how wages, salary, drawing account, commissions and all other monies earned and payable are calculated and how they will be paid if the employment relationship is terminated by either party. Both the employer and employee must sign the written agreement and employers must keep the written employment agreement on file for at least three years.
Employers should put the terms of employment for commissioned salespersons in writing because the absence of a written agreement creates a presumption in favor of the employee. Specifically, if the employee were to bring a wage complaint before the New York State Department of Labor, the terms of employment presented by the employee will be considered correct.
- George T. Bruckman, Esq.