Help wanted: Are commission pay changes legal?

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According to the New York State Labor Department,

According to the New York State Labor Department, commission-sales agreements, or any changes to them, must be in writing and a copy given to the sales people affected. Photo Credit: iStock

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Carrie Mason-Draffen Newsday columnist Carrie Mason Draffen

Mason-Draffen, a business reporter, writes a column about workplace issues.

From time to time Help Wanted focuses on a single topic. Today's subject is commissions.

DEAR CARRIE: My husband works as a sales representative for a manufacturer. Two years ago he opened an account with a distributor and earned a 6 percent commission on sales generated from the account. Recently, however, the owner of the company informed my husband that it would no longer pay 6 percent on this type of account, since the policy has always been to pay 3 percent, even though the pricing for this account is pretty high. What's worse, when my husband received his commission check, he realized the company had taken back the difference between the two commission rates going back a year. Is this legal? -- Commission Take-back

DEAR COMMISSION: Altering the terms of your husband's paid-out commissions is illegal, according to the New York State Labor Department.

"A retroactive change in terms and conditions would violate the labor law," the department said.

Also, commission-sales agreements, or any changes to them, must be in writing and a copy given to the sales people affected, the department said.

I also spoke with employment attorney Sabrina N. Hannam, who noted that by taking back some of your husband's paid-out commission, the company essentially made an unauthorized deduction from his wages.

Section 193 of New York State labor law prohibits an employer from making deductions from employees' wages unless permitted by law or authorized by workers, Hannam said.

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"[Section] 193 appears to be applicable in this instance since [it] was designed to protect employees from having charges made against their earnings, except under limited circumstances, or for the benefit of the employee," said Hannam, whose law firm is in Rosedale. "The information provided does not suggest that the charges against the employee were for the benefit of the employee, but [were] for the sole benefit of the employer."

As for recourse, he should first consider talking to the company, if he hasn't already, or show a manager a copy of this column.

If those efforts are unsuccessful, he should contact theNew York Labor Department at 516-794-8195 or 212-775-3880.

Click here to read more on commissions and state labor law at the N.Y. State Labor Department webiste,

DEAR CARRIE: I have been employed for many years in New York State as a sales representative, and my compensation is 100 percent commission-based. Within the past year my company, which is headquartered out of state, changed its pay policy. Now I receive compensation for a project once the bill for it has been paid to my company. Often this can take several months. Is this legal? -- Delay Legal?


DEAR DELAY: Whether the waiting time is legal depends on whether you are an employee or an independent contractor. Here's what the New York Labor Department said:

"If the sales representative is an independent contractor, he needs to be paid [a] commission no later than five days after it is earned. The definition of 'earned' may be changed prospectively [or in the future] at any time. If the sales representative is an employee, he needs to be paid [a] commission monthly. Where there are significant gaps between earned commissions, an employer can provide recoverable draw amounts to meet the requirement."

Click here to find an unpaid-wages claim form on the New York Labor Department website at

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