Unpaid Commission and salary vs. hourly

My employer of 2 1/2 years does not pay a weekly salary, overtime at a rate of time and a half, or time worked out of the office unless pre-approved. I am considered salaried/non-exempt and told I am salaried but, paid an hourly rate and not paid for any hours worked under 40 unless I use vacation or sick time.

I signed a commission agreement for a percentage of the sales and to date have not received any commission.

I received a raise after asking for a copy of the signed agreement and was told the agreement void. I was never told this nor given anything in writing.

I have demanded payment of my commission in writing and attached a copy of the signed agreement and Sales Reports.

If they do not pay within the time period specified in the demand letter what are my options? They owe me close to $46,000 in commission.

1 answer  |  asked Sep 23, 2006 07:41 AM [EST]  |  applies to New York

Answers (1)

David M. Lira
Commissioned or Non-Exempt

Your query raises a number of issues, the firts of which is whether you are a commissioned salesperson. Commissioned sales people are an exception to the general rule that employees are to be paid on an hourly basis. Whether you are really a commissioned sales person will depend on the terms of your employment, including the precise wording of any written agreement you may have entered into.

Next: If you have a commission agreement, commissions get special protection under New York State law, in a way similar to wages. The issue in your case is whether and when your employer changed the terms of your employment. Your written agreement may effect any legal analysis of your situation, but, because I don't have a copy of that agreement in front of me right now, I'll assume it has no application.

Under the employment at will doctrine, an employer can change the terms of your employment at any time, for any reason or no reason at all. So, again ignoring what your commission agreement might otherwise say, your employer can stop paying commissions at any time. You would, however, be entitled to commissions earned at any time before your employer informed you of the change in terms of your employment.

If you are owed commissions, you can sue for payment of those commissions.

Next: You talk about being a salaried/non-exempt employee. From a legal standpoint, this makes no sense whatsover. Non-exempt employees are hourly. Only exempt employees can be paid on a salaried basis.

Next: Even if we were to assume that your duties were such that you were truly an exempt employee, remember being exempt is the exception to the general rule. Employers can easily lose the benefit of having exempt employees if they treat their exempt employees like hourly employees. For example, an exempt employee will be entitled to overtime (for time worked beyond 40 hours in a workweek) if the employer docks employees for being late or leaving early.

Overall, I would suggest that you set up a consultation with a employment attorney to review your situation in detail.

posted by David M. Lira  |  Sep 25, 2006 09:41 AM [EST]

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