Employers Must Make Timely Commission Payments to Employees once the Employment Ends
New York law requires that once your employment ends, your employer must pay you any earned commissions within a reasonable timeframe — assuming you were an employee and not an independent contractor.
If you were an employee and your labor generated the obligation for a customer to pay your employer, your commissions are likely “earned” — even if the actual customer payment happens later. Once earned, commissions are treated as wages, and employers must pay them promptly after receiving the customer payment, or within a reasonable time, depending on the terms of your commission plan.
Failing to do so may violate:
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NYLL § 193, which prohibits employers from making unauthorized deductions from wages.
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NYLL § 198, which allows employees to recover unpaid wages, liquidated damages, interest, and attorney's fees.
For Independent Contractor Sales Representatives
If you were an independent contractor sales representative (not an employee), different rules apply. You may be covered by NYLL § 191-a through § 191-c, which provide clear timing requirements:
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Under § 191-c(1), all earned commissions must be paid within five business days after termination — or within five days of the commission becoming due if not yet due at termination.
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§ 191-c(3) provides that a company that fails to pay on time is liable for double damages, plus attorney's fees and court costs.
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These provisions apply only if you were a “sales representative” under the statute — typically someone who solicits wholesale orders and is paid by commission, but is not considered an employee.
How to Tell Which Rules Apply to You
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If the company withheld taxes, gave you benefits, or controlled your work, you are likely an employee.
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If you received IRS Form 1099 and operated independently, you are likely an independent contractor and should be paid under the five-day rule in § 191-c.
In Either Case:
If your work generated the company's revenue and they received payment from the customer, you should not be denied commission — and the law provides powerful remedies if your former employer fails to pay.