Sales Professionals · Unpaid Commissions
You closed the deals. They kept the commission.
A New York attorney's guide to recovering unpaid sales commissions.
Commission disputes arrive with a familiar sound: the comp plan gets "reinterpreted," the big deal you closed pays out after your last day: to no one, or the company simply stops sending statements. New York treats earned commissions as seriously as any wage, and for independent sales reps, it authorizes double damages.
Provided through DemandLetterNY.com, a service of Hochman Law PC.
Independent sales reps: the double-damages statute.
NY LABOR LAW §§ 191-b, 191-c · SALES REPRESENTATIVES
If you sold as an independent contractor rep, New York requires the principal to pay earned commissions per your contract, and when the relationship ends, all earned commissions within five business days of termination (or of the date they later become due). A principal who fails to pay in accordance with these provisions is liable for double damages, plus attorney's fees and costs to a prevailing rep. Few principals know this statute; their lawyers do, which is why a letter citing it moves quickly.
Employees: your commissions are wages.
NY LABOR LAW §§ 191, 193, 198 · WAGE CLAIMS
W-2 commissioned salespeople are covered by New York's wage statutes: earned commissions must be paid per the agreed terms, unauthorized deductions are prohibited, and a successful wage claim can add liquidated damages and attorney's fees. Employers must keep the commission terms in a signed writing, and when the writing is missing or ambiguous, the ambiguity is generally construed against the employer. Related claims are covered on our unpaid wages page.
"You have to be employed on the payout date."
The most litigated line in every comp plan. Whether a forfeiture-on-departure clause holds depends on the plan's wording and whether the commission was already earned under it. New York courts will not casually let an employer keep commissions on deals you fully closed. If you were let go right before a large payout, that timing is worth an attorney's look, not a shrug.
Build the commission file now.
- The comp plan, every version, and the offer letter or rep agreement.
- Your pipeline records: CRM exports, signed customer contracts, booking confirmations for each disputed deal.
- Commission statements received, and the gap where they stopped.
- Every email about the disputed deals: especially any admission a deal "counted."
The demand letter carries unusual weight here.
Commission math is documentary: the contract, the closed deals, the rate. A letter that computes the number, cites the double-damages exposure, and encloses the key documents leaves little to argue about. Compare escalation paths in demand letter vs. small claims, and mind the deadlines in how long you have to act.
A flat-fee demand letter drafted and signed by a New York attorney often resolves it without a lawsuit. Start online at DemandLetterNY.com, a service of Hochman Law PC, or learn more about flat-fee demand letters.
A flat-fee letter drafted and signed by a New York attorney: Unpaid commission demand letter at DemandLetterNY.com, a service of Hochman Law PC.
Questions people ask us.
What counts as an 'earned' commission?
Whatever your plan says: signing, booking, invoicing, or collection. When the plan is silent or ambiguous, New York generally construes it against the company that drafted it.
I never signed a written comp plan. Who does that hurt?
The company. New York requires commission terms for both employee salespeople and independent reps to be in writing; the absence of one weakens their position, not yours.
They 'adjusted' my closed deals after a territory change. Legal?
Retroactively reducing commissions already earned under the plan in force is exactly the kind of deduction New York wage law targets. Prospective plan changes are treated differently from clawbacks.
How long do I have to bring a commission claim?
New York wage claims generally carry a six-year window, and contract claims run six years as well. But records and witnesses are freshest early: move while the CRM export still exists.
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