An Employee's Guide to Pursuing Wrongfully Withheld Commissions in New York

If your commission has already been earned under New York law, your employer has to pay it — even if you've been fired, even if you've already resigned, and even if they've changed their mind about the deal. The harder question is almost never whether unpaid commissions are illegal. It's whether the commission was actually "earned" yet, and when exactly that occurred. That typically turns on what your agreement says and what happened before you left.

New York treats earned commissions as wages, and wages carry real legal protections: strict payment deadlines, limits on deductions, and, in some cases, double damages and attorney's fees against an employer who won't pay. And whether you're paid as a W-2 employee or a 1099 independent sales representative, the fundamental logic is the same — a commission you've earned doesn't disappear because the employment relationship did. The specific deadlines and remedies differ slightly between the two categories, but the core protection is the same either way.

When Does a Commission Actually Become "Earned"?

This is where most disputes actually live. Your employer can't legally withhold a commission that's already been earned. But they can argue that it was never earned in the first place.

A commission is earned according to whatever your written agreement says triggers it: the signed contract, the invoiced sale, the customer's payment, the close of the fiscal quarter — whatever your commission plan actually specifies. Absent a controlling agreement, courts look to your employer's established practice and to whether you did everything required of you to complete the sale.

The single biggest factor in any dispute is the written agreement, which brings up the next issue.

The Written Agreement Requirement

New York doesn't just encourage a written commission agreement — it requires one. Employers must give commissioned employees a written agreement, signed by both sides, spelling out how commissions are computed and paid.

If there's no written agreement, that doesn't mean you're out of luck — but it does shift the fight to what the parties actually understood and how commissions were historically calculated and paid, which is a harder case to make than pointing to a signed document. If you have any version of your plan in writing — a plan document, an offer letter, even an email describing how you'd be paid — hold onto it.

What Happens to Your Commission When You're Fired, Laid Off, or You Resign

This is the part employers most often get wrong, deliberately or not: the end of your employment does not erase a commission you already earned. And this is where disputes often arise, because employers are rarely eager to pay a large commission to a team member who is on their way out the door.

Once a commission is earned under your plan's terms, it's a wage, and it has to be paid on your regular pay schedule like any other wage. Termination doesn't change that. What your employer can dispute is whether the commission was earned before your last day. That's why the "when is it earned" question above usually decides the whole case.

Can Your Employer Change the Commission Plan After You've Closed the Deal?

This is one of the most common fact patterns we see, and it splits into two scenarios that get treated very differently:

• Changing the plan going forward: The employer can change the commission rules for future deals, future quarters, future hires, especially if the commission plan reserves that right. This principle is rooted in the "at will" doctrine, which is the employer's (and the employee's) right to terminate the relationship at any time. Because the employer can terminate the relationship at any time, they can also change the terms.

• Changing the terms retroactively, after you've already closed a specific deal under the old plan: The employer cannot reduce your rate, add a new hurdle, or reclassify the deal to avoid paying out. This runs into the "earned wage" problem above. If the commission was already earned under the plan in effect at the time of the sale, a later plan change generally can't take it back. This is rooted in the legal doctrine of 'reliance.' The employee has already done the work to earn the commission upon the understanding conveyed by the original commission plan (which they have 'relied' upon). Changing it after the work is done is inherently unfair, because at that point, the employee has no choice.

My go-to metaphor for this is "moving the goalposts during the game." It's the fact pattern that comes up more than almost any other: a salesperson closes a deal in good faith under one set of rules, and only after the ink is dry does the company roll out a "clarified" plan, a new hurdle, or a revised definition of what counts as a qualifying sale — timed just well enough to catch that specific deal. Sometimes it's dressed up as an administrative update. Sometimes it isn't dressed up at all; you just get told that rules have changed.

This situation always reminds me of a scene in Aladdin, where Aladdin is thrown in a dungeon with a toothless old beggar. "You've heard of the Golden Rule, haven't you?" Asks the beggar. "Whoever has the gold, make the rules!" (Spoiler alert -- the beggar turns out to be the greedy villain, Jafar). In modern times, Jafar might have ended up managing a hedge fund or brokerage, where this attitude seems to predominate.

But Jafar's Golden Rule is not the law, at least in New York. Once a commission has become earned under the plan that existed at the moment the triggering event happened — the signed contract, the delivered order, whatever your agreement specifies as the trigger — that fact doesn't change because a new document shows up later with a different formula. Courts look at what plan governed the deal when it closed (i.e., when it was earned), not which version happens to be sitting in the employee handbook the day the check would otherwise go out. An employer can change its comp plan going forward. What it can't do is reach backward and rewrite the outcome of a sale that already happened under the old one.

The analysis in disputes like this can get complicated quickly — the real answer always turns on the specific plan language and the specific timeline. But if I had to generalize, it comes down to one thing: was your employer organized, systematic, and well-advised?

Well-run companies build their commission plans around fixed periods — a fiscal year, a quarter — and only revise the plan at the start of the next one. They document the edge cases in detail, in writing, before anyone's counting on that money. They have lawyers review their commission documents before a dispute arises.

Sloppy companies, by contrast, change the rules whenever it's convenient, treat every revision as something they're free to apply backward, and rarely put any of it in writing until there's already a dispute. That gap in discipline is usually the best evidence you'll have.

The tell is usually in the timeline. Ask when the new terms were actually communicated relative to when the deal closed — not when the employer says the change was "effective." A revision that gets emailed out after your signature is already on the contract, or one that happens to apply only to the specific deal (or the specific salesperson who just had a big quarter), is a strong sign this is the retroactive kind rather than a legitimate go-forward change.

What to Do If You Think You're Owed a Commission

1. Pull every version of your commission plan or agreement: the original, any amendments, any emails describing changes.

   
   

2. Reconstruct the numbers: the deals, the dates they closed or were paid by the customer, and what the plan says triggers payment for each one.

   
   

3. Put your demand in writing to your employer before escalating it starts the clock on a record of the dispute and sometimes resolves it without litigation.

   
   

4. Talk to an employment attorney before you sign anything: a severance agreement or a release presented at termination will often try to fold in a waiver of exactly this claim.

What You Can Recover If Your Employer Won't Pay

In many contexts, New York doesn't just make your employer pay what it owes — it stacks penalties on top designed to make it not worth their while to fight a legitimate claim in the first place. That's worth understanding upfront, because it changes how you should think about whether a dispute is worth pursuing.

The core recovery is unpaid wages plus liquidated damages. If you win a wage claim, you're entitled to the unpaid commission itself, plus liquidated damages equal to 100% of that amount — effectively doubling the recovery. If the violation is found willful, that figure can climb to 300%. "Willful" doesn't require proof that your employer was malicious; courts generally look at whether the employer knew, or showed reckless disregard for whether, it was violating the law. An employer that got legal advice and made a genuine, documented, good-faith call can sometimes avoid the liquidated damages — but the burden is on them to prove it, not on you to disprove it.

Attorney's fees and interest come with the claim. New York's wage law shifts attorney's fees to the losing employer and adds prejudgment interest on top of everything else. This is the detail that makes these cases economically viable even when the underlying commission dispute is a few thousand dollars — you're not weighing the size of the unpaid commission against the cost of a lawyer, because a successful claim recovers the fees separately.

You can typically reach back six years. If this isn't the first time your employer has played games with a commission plan — if there's a pattern going back further than your most recent dispute — the lookback period may let you capture more than just the most recent incident.

There are separate fixed penalties for paperwork failures, and employers often have more of these than they realize. If your employer never gave you the wage notice required when you were hired, or never provided compliant wage statements with your pay, those are independent violations — $50 for each day the notice violation continued (capped at $5,000) and $250 for each day of a pay-statement violation (also capped at $5,000). These get pleaded alongside the underlying commission claim, not instead of it, and they're often the parts of a case an employer's own recordkeeping failures hand you for free.

FAQ

Is a bonus the same thing as a commission under New York law?No. A commission is tied to a percentage of a specific sale. A bonus can be earned in the same way if it's based on a formula or written policy, but a genuinely discretionary bonus — one your employer isn't contractually obligated to pay — doesn't get the same wage protection. We cover that distinction in a separate guide on unpaid bonus disputes.

My employer says my commission was "discretionary" — is that automatically true? Not just because they say so. What matters is whether your plan or agreement actually made the payment conditional on your employer's discretion, or whether it set an objective formula or trigger. Calling a payment discretionary after the fact doesn't make it so.

Can I still claim a commission if I never signed a written agreement? Yes, but it's a harder case. Without a signed agreement, the dispute turns on your employer's established practice and what both sides understood — so any written record of how commissions were calculated and paid (emails, offer letters, past payment history) becomes important evidence.

What if I'm paid as a 1099 independent contractor, not a W-2 employee? It depends what kind of independent contractor you are. New York's wage law is built around employees, with one narrow exception: sales representatives who solicit orders for a manufacturer, importer, or distributor of goods get their own specific protections under a separate set of provisions. If that's not your situation — you're a 1099 consultant, advisor, or salesperson outside that manufacturing-and-wholesale context — the wage law generally doesn't apply to you directly. That doesn't leave you unprotected, though: New York's Freelance Isn't Free Act now gives independent contractors doing work above a small dollar threshold analogous protections — a right to a written contract, a right to timely payment, and double damages plus attorney's fees for nonpayment. It's a different statute with a different mechanism, but it closes most of the gap. Check out our guide to the Freelance Isn't Free Act.

Can my employer deduct money from my commission? Only in limited circumstances. New York law restricts wage deductions to a specific list — things like insurance premiums or retirement contributions you've authorized in writing — plus narrow, regulated procedures for correcting a genuine overpayment. A general "we can deduct for X" clause in your commission plan doesn't override this. Draws against future commissions are handled differently: they're not a deduction from an earned wage, they're an advance against one, so they get reconciled against what you actually earn rather than clawed back afterward.

John J. Thompson is a partner at Thompson & Skrabanek, PLLC, a New York commercial litigation and transactional law firm. He represents both employees and businesses in contract and compensation disputes, including matters involving unpaid wages, commissions, and bonuses.

If you believe you're owed a commission or bonus your employer won't pay, we can review your plan documents, assess what New York law entitles you to, and help you figure out the right next step — a written demand, a negotiated resolution, or litigation. Contact us today to talk through your situation.