Sales Commissions Under NY Law
Under New York Labor Law (NYLL), employees who earn commissions are entitled to important wage protections. These protections apply regardless of whether the employee is still employed or has been terminated — what matters is whether the commission was earned.
The New York Court of Appeals in Pachter v. Bernard Hodes Group, Inc. confirmed that the timing and conditions under which a commission is considered “earned” depend on the terms of the agreement between the parties. However, courts may not enforce contract terms that result in unlawful forfeiture of earned wages.
Key Concepts:
- Commissions are wages under NYLL § 190
- Earned commissions must be paid, even after termination, under NYLL § 198
- Employers cannot impose forfeiture conditions that violate NYLL § 193
➡️ See When Is a Commission Earned? to explore how courts determine when a commission vests.