Commission Plan Changes
Employers have some flexibility to modify commission plans — but those changes must be prospective and clearly communicated in writing.
🔁 What Employers Can Do:
- Change commission terms going forward, as long as they provide advance written notice (as required by NYLL § 195).
- Clarify ambiguous terms — ideally in writing.
🛑 What Employers Cannot Do:
- Retroactively apply new terms to commissions that were already earned under a previous plan.
- Use policy changes to forfeit or claw back earned wages.
- Unilaterally modify commission agreements after the work is done but before payment is made — especially if it delays or denies payment.
📘 Case Insight:
- In Pachter v. Bernard Hodes Group, the Court upheld the idea that commission terms can be defined by agreement — but also emphasized that employers must honor those terms and can't manipulate them post hoc to deny payment.
- Under NYLL § 193, any unauthorized deduction — including from commissions already earned — is likely unlawful.
✅ Best Practice for Workers:
- Always request a copy of your commission plan in writing.
- Ask for confirmation of how commissions will be paid for deals already in the pipeline when plan changes occur.
- Document everything in writing if your employer tries to change your pay terms midstream.