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Corporations Now Liable for Greater Damages for Failure To Pay Commissioned Employees
in New York State
On April 9, 2011, New York State’s Wage Theft Prevention Act took effect. The Act increases corporate liability—known as liquidated damages—from 25 percent to 100 percent if a corporation fails to pay employees whose wages are based on commission. In essence, an employee who successfully litigated a claim for unpaid wages is entitled to recover twice the wages owed to him/her, as well as prejudgment interest and attorneys’ fees.
According to New York State Labor Law, “any employee whose principal activity is the selling of any goods, wares, . . .or any article or thing and whose earnings are based in whole or in part on commissions” is classified as a “Commission Salesman.” As such, that person’s earnings are defined as wages, “regardless of whether the amount of earnings is determined on time, piece, commission or other basis.” Moreover, all employees have “the right to recover full wages, benefits and wage supplements accrued during the six years previous to the commencing of such action . . ..”
Under the new law, an employee who won a claim for $60,000 in unpaid commissions over a six-year period would be entitled to $120,000, plus interest and attorney fees.
Furthermore, we expect that because the Act was designed to correct defects in existing law—in other words for an ameliorative purpose—it will be applied retroactively.
If you or someone you know has been a victim of “theft of wages,” contact James Mahon at Lawler Mahon & Rooney or your current legal counsel today.
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