Commissions

Respected Bergen County Employment Attorneys Committed to Ensuring Workers Receive the Incentive-Based Pay They Earned

Commissions often are the backbone of an employee’s earnings, rewarding the effort and results that drive business success. Yet disputes over unpaid or improperly calculated commissions are all too common, leaving employees shortchanged and frustrated. At Rabner Baumgart Ben-Asher & Nirenberg, P.C., our New Jersey employment lawyers understand how critical commissions are to your livelihood. Our experienced attorneys are here to ensure that employers follow the law, honor their agreements, and pay employees the wages they have rightfully earned.

An Employer’s Obligation to Pay Commissions to Employees

As a commission-earning employee, you know that commissions are wages earned based on sales or other performance metrics, but when do are commissions “earned” and when does your employer need to pay you your commission checks? In New Jersey:

• Accruing Commissions: Commissions can accrue as early as when you complete the work required to earn the payment, such as finalizing a sale or meeting specified performance benchmarks, much later in the sales process such as when the customer has paid for the good or services, or somewhere in between.

• Timely Payment: Under New Jersey law, your employment agreement or commission plan typically will dictate when your employer must pay commissions.

• Changing the Commission Formula: Employers can only change your commission structures prospectively, meaning with advance notice. Generally, any commissions earned under the old formula still must be paid.

When disputes arise over whether a commission has been earned or paid, our experienced attorneys can review the facts, interpret applicable laws, and advocate on your behalf. In some instances, an employee not only can recover their unpaid, but also liquidated damages, meaning up to two times the amount of their unpaid commissions.

Draws and Commissions

A draw is an advance on future commissions, providing employees with a steady income while they work toward earning commissions. While draws can be helpful, they also can raise legal and financial questions that employees should be aware of:

• Draws as Advances: Employers may structure draws as recoverable advances, meaning employees need to repay them if their earned commissions do not cover their draw.
• Negative Balances: If an employee’s commissions fall short of their draw, a commission plan or agreement might allow an employer to carry forward a negative balance, or even ask that you pay them back.
• Final Wages: When employment ends, disputes can arise over whether the employer can deduct unpaid draws from the final paycheck. New Jersey law generally prohibits deductions from wages without the employee’s prior written consent.

If you are working under a draw-and-commission arrangement, it is critical to understand your rights and obligations. Our firm can review your agreement to ensure it protects your rights and entitles you to receive the money you earned.

Independent Sales Representatives

An independent sales representative is a person or business that is contracted to sell a company’s products or services but is not an employee of the company. The New Jersey Sales Representatives Rights Act (NJSRRA) provides important protections to independent sales representatives. More specifically, the NJSRRA says that a company must pay you the entirety of your owed commissions within 30 days of the termination of your contact with the company.

If a company violates NJSRRA, it is likely to be liable for the outstanding commissions plus three times the unpaid commissions (or belatedly paid commissions), as well as your attorney’s fees.

Know Your Rights When It Comes to Commissions

Disputes over commissions can involve complex questions about when commissions are earned, how they are calculated, and whether deductions are lawful. At Rabner Baumgart Ben-Asher & Nirenberg, P.C., we understand the intricacies of wage and hour law and are committed to helping employees protect their rights.

If you believe that your employer or principal has failed to pay you the commissions you were owed, contact us today to schedule a consultation. Our experienced attorneys will review your case, explain your options, and help you pursue the compensation you deserve. Let us fight for your rights and ensure your hard work is properly rewarded. You can reach us at 201-777-2250 or through our secure online contact form.