New York State's New Laws on Commission Pay for Employees

Crafting Employment Agreements and Commission Structures to Commission Structures to Comply with Tougher Legal Requirements

Does New York Law Make Employers More Vulnerable to Other New York State and Federal Labor Laws?

Recording of a 90-minute CLE webinar with Q&A

Conducted on Wednesday, May 7, 2008

Program Materials

Description

Employment law developments in New York State in the last several months drastically impact how employers across the country must treat any commission-based sales people who conduct business in the state of New York.

The legislature passed a law requiring employers to enter written agreements with sales personnel outlining the terms of employment. In addition, New York courts have interpreted statutes that may make certain provisions of commission plans unlawful and expose employers to substantial liabilities.

Drafting effective agreements with commission sales people requires a careful, calculated approach. Incorrect wording, omitted terms or conditions or a lack of awareness of the potential consequences of using or not using certain language can land employers in an unfavorable and costly position.

Listen as employment law attorneys from Venable LLP explain the new changes in the law, the interplay between the commission pay law and Federal and state minimum wage and overtime pay laws, and the impact of recent interpretations of New York labor codes on forfeitures or deductions in commission pay. The teleconference also offers best practices for crafting enforceable employment agreements.

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Outline

  1. What are the elements of an acceptable written employment agreement?
    1. Enforceable at-will termination clauses
    2. Proper definition of when commission is earned
    3. Proper subtraction of expenses from commission
    4. Retroactive protection from past mistakes
    5. Requiring commission confirmation on receipt
  2. What terms should be avoided in a written employment agreement?
    1. Terms leading to wage/overtime/tax liability
    2. One-way clauses
    3. Implied guarantees of employment
    4. Impermissible deductions from commission
    5. Improper forfeiture provisions
  3. How can employers protect themselves and still run their business?
    1. Properly utilizing outside sales exemptions
    2. Avoiding the outside sales “trap”
    3. Establishing the administrative exemption
    4. Paying salary and/or minimum wage through commissions

Benefits

The panel reviewed these and other key questions: 

  • What does New York's new commission pay law require of employers assigning commission-based sales employees to the state?
  • What provisions are generally acceptable in the written employment agreement — and what terms should be avoided?
  • What can employers do during the drafting of commission agreements to protect themselves from future liability?
  • How does the new commission pay law interact with existing laws governing pay in New York State?

Faculty

Ari Karen
Ari Karen
Partner
Venable

He assists companies with proactively complying with wage and hour and other labor and employment regulations and...  |  Read More

James Edward Fagan, III
James Edward Fagan, III
Venable

He represents and counsels employers regarding wage and hour matters, employment agreements and restrictive covenants,...  |  Read More

Shaffin A. Datoo
Shaffin A. Datoo
Venable

He represents employers in matters involving discrimination claims, harassment, retaliation, class and collective...  |  Read More