State laws that affect the relationship between a manufacturer and a commissioned independent sales representativePosted: June 12, 2013
You need to make sure you understand the law if you are a manufacturer or an independent sales representative. For this chart, the following definitions shall apply.
Referenced in a Statute as:
Referred to Here as:
Manufacturer, Principal or Employer
Commissioned Sales Person, Wholesale Sales Representative, Sales Representative, Employee (Iowa)
The Headings used are defined or explained as:
State: This is the state where the law is applicable. Most of the statutes, however, say that a rep can sue for unpaid commissions in this state for money owed by the manufacturer in other states. Eleven states require a written contract between the Mfg. and the Rep. Three states probably require a written contract between a Mfg. and Rep. All states say that a request to pay a person a commission for a sale is a contract.
Statute Name & Number: This is the name of the statute and number of the statute. This is always linked to the statute.
K Required: This means the burden is on the Manufacturer to create a written contract. Many of the statutes require not only a signature of both parties but proof in the form of a receipt that the rep has received a copy of the contract.
Written K Controls (except non-payment issues): If there is a dispute or the written contract is different from the statute the written contract controls the payment of commissions upon termination.
Other K Requirements: Any special or unique issues in the statute that may be of importance.
Pay upon Termination: This is what the statute requires as far as commissions paid upon termination of the contract with the Rep.
Damages: If the Rep is not paid as per the contract or the statute, this sets forth the damages that a rep can recover for non-payment. Most states this is a factor of the commissions owed, which can be as much as four times the commissions owed. Iowa, Michigan, Minnesota and Missouri have more complicated ways of determining damages based upon the time until paid or other ways to calculate the damages.
Most states allow a rep, if successful in a suit to recover unpaid commission’s damages in excess of the commissions owed. In several cases that amount totals four times the commissions owed. If the rep is successful in recovering damages, the rep can also recover attorney fees and court costs.
Eight states allow the Mfg. to recover attorney fees and court costs if the lawsuit filed by the Rep was frivolous. Frivolous in a legal context means there was no basis for the suit. Have a claim and losing it for some reason, is not frivolous.
Most states require commissions that were earned but not due until after the termination of the Contact between the Mfg., and the Rep must be paid to the Rep.
Court Costs & Atty Fees: Either the Rep or in a few cases, the Prevailing party (winner) can recover court costs and attorney’s fees if they successfully sue for unpaid commissions.
Suit brought in a state of Rep Choice: This statute states that even though the Mfg. may not have a business location within the state, which would normally be needed to establish venue and jurisdiction over the manufacturer, the statute provides the necessary venue and jurisdiction. That means the manufacturer can be brought to suit in that state.
K can waive the statute: This means that a contract between the Rep and the Mfg. cannot waive parts of the statute, specifically the requirement on how commissions are to be paid on termination, damages, attorney fees and costs and whether and jurisdiction and venue are established.
Misc.: More unique or important sections of the statute you should know about.
This information is here as a starting point. Contact your attorney for additional information.
27 state laws and short interpretations are listed below.
|State||Statute Name & Number||K Required||Written K Controls (except non-payment issues)||Other K Requirements||Pay upon Termination||Damages||Court Costs & Atty Fees||Suit brought in state of Rep Choice||K can waive statute||Misc|
|Alabama||Alabama Code Annotated § 8-24-1||Maybe§ 8-24-2||Yes§ 8-24-2||Contract must set forth how commission calculated and to be paid. Mft must provide copy of contract to rep§ 44-1798.01||30 Days after termination30 Days post termination§ 8-24-2(c)||Three times damages§ 8-24-3||Reasonable Attorney fees and Costs§ 8-24-3||Yes§ 8-24-4||No§ 8-24-5||Rep can bring all claims against mfg in this action§ 8-24-5|
|Arizona||Arizona Revised Statutes § 44-1798.01||Yes§ 44-1798.01 A||Rep must receive a signed copy of the contract and sign a receipt acknowledging receipt of signed copy§ 44-1798.01 B||Paid within 30 days§ 44-1798.02 A14 days on commissions due after termination§ 44-1798.02 B||Three times the unpaid commissions owed§ 44-1798.02 C||Reasonable attorney fees and costs§ 44-1798.02 D||Final Settlement null & void unless paid in full§ 44-1798.02 F|
|Arkansas||Arkansas Code of 1987
|Yes4-70-302(a)||Method of computation and payment must be in written contract4-70-302(a)Rep must receive copy of contract 4-70-302(b)||If not written contract, all commissions must be paid within 30 days after termination4-70-303||3 times damages4-70-306||Reasonable attorney fees and costs4-70-306||Yes4-70-302(c)4-70-304||Waiver of statute is void4-70-305|
|California||California Codes Annotated § 1738.10Independent Wholesale Sales Representatives Contractual Relations Act of 1990§ 1738.11||Yes§ 1738.13(a)||Commission Rate, Payment dates, Territory, Territory Exceptions, ChargebacksRep must be given a copy of the contract, sign it and sign a receipt acknowledging receipt of the signed contract§ 1738.13(b)||Treble DamagesFailure to pay or Failure to have written contract§ 1738.15||The Prevailing Party can recover Reasonable Attorney Fees & Costs§ 1738.16||Yes§ 1738.14||No§ 1738.13(e)||Rep must receive written info of all orders, customer name and invoice numberCommission rate on each order§ 1738.13(c)|
|Colorado||Colorado Revised Statutes 12-66-101||Probably§ 12-66-103||Treble damages12-66-103(1)||Prevailing Party receives Reasonable attorney fees and costs||Yes12-66-102|
|Illinois||Sales Representative Act. Illinois Compiled Statutes Annotated § 820 ILCS 120/0.01.||13 days after termination and 13 days if commissions become payable after termination§ 820 ILCS 120/2||Exemplary damages of 3 times commissions owed§ 820 ILCS 120/3||Reasonable attorney fees and court costs to rep§ 820 ILCS 120/3||No§ 820 ILCS 120/2|
|Indiana||Indiana Statutes Annotated 24-4-7-0.1||Must be paid within 14 days24-4-7-5(a)||Exemplary Damages Three times the commissions owed24-4-7-5(b)||If exemplary damages awarded, the sales rep receives reasonable attorney fees and costs24-4-7-5(c)If suit is frivolous, the mfg can receive reasonable attorney fees and costs 24-4-7-5(c)||Yes24-4-7-6||No24-4-7-8||If you make an offer to pay commissions you cannot revoke the offer once the commissions are earned 24-4-7-7|
|Iowa||Iowa Wage Payment Collection Law
Iowa Code 91A.1
|5% per day for every day not paid91A.2 6||Yes if intentionally failed to pay91A.8||Only disputed amounts can be withheld, all non-disputed amounts of commissions must be paid91A.7|
|Louisiana||Louisiana Revised Statutes § 51:441||Yes§ 51:442||A written contract supersedes statute on payment of wages§ 51:442||Rep must receive a copy of the contract§ 51:442||Per the contract or On the 30th working day after termination§ 51:443||Treble damages§ 51:444||Rep’s Attorney fees§ 51:444||Yes§ 51:445 A§ 51:445 C||No§ 51:445 B||Sales Rep can sue for all money owed under this statute.Statute does not prohibit other seeking other forms of relief§ 51:445 D|
|Maine||Maine Revised Statutes Annotated § 1341||Unless otherwise in contract requires 14 days’ notice to terminate§ 1342||Payment within 30 days of termination§ 1343||Exemplary damages of 3 times commissions owed§ 1344 1||Reasonable attorney fees and costs§ 1344 1||Yes§ 1344 4||Yes§ 1343||If action was frivolous mfg can recover actual attorney fees and costs§ 1344 2|
|Maryland||Annotated Code of Maryland
|Commissions must be paid within 45 days of termination§ 3-604||Can recover up to 3 times the commissions due§ 3-605(a)(1)||Reasonable attorney fees and costs§ 3-605(b)||Yes§ 3-606||Law cannot be waived§ 3-603||Rep must give mfg 10 days’|
|Massachusetts||Annotated Laws of Massachusetts
Chpt 104 § 7
|YesChpt 104 § 8||Commissions must be paid within 14 days of terminationChpt 104 § 8Commissions that come due after termination must be paid within 14 daysChpt 104 § 8||Willfully or knowingly fails to pay, rep can recover an additional 3 times the amount dueChpt 104 § 9||Rep can recover reasonable attorney fees and court costsChpt 104 § 9||Yes104 § 9||NoChpt 104 § 9|
|Michigan||Michigan Compiled Laws § 600.2961||YesSec. 2961(e)(2)||Commissions must be paid within 45 days of termination§ 600.2961(e)(4)||Actual damages plus 2 times amount of commissions or $100K or whatever is less§ 600.2961(e)(5)(b)||Rep can recover reasonable attorney fees and costs§ 600.2961(e)(5)||No§ 600.2961(e)(8)|
|Minnesota||Minnesota Statutes 181.13||Yes§ 407.912||3 days after termination181.145 Subd 2||Penalty of 1/15 per day not to exceed 15 days181.145 Subd 3||Yes181.171 Subd 3||Sales made before termination must be paid after termination181.145 Subd 5|
|Missouri||Missouri § 407.911||Yes§ 407.912||Within 30 days of termination§ 407.912||Based on the time due till paid§ 407.913||Reasonable attorney fees and costs§ 407.913||Yes§ 407.914||No§ 407.915||Rep to be paid on commissions earned before termination but not due until after termination§ 407.912 2|
|Nebraska||Nebraska Wage Payment and Collection Act Nebraska Revised Statutes Annotated § 48-1229||30 days after termination§ 48-1231(1)||Court Costs and attorney fees of not less than 25% of damages§ 48-1231(1)||Damages are increased if case appealed§ 48-1231(1)|
|New Hampshire||Sales Representatives and Post-Termination Commissions New Hampshire Revised Statutes Annotated 339-E:1||Yes339-E:2||Commissions must be paid within 45 days of termination339-E:2||Exemplary damages of 3 times commission339-E:3||Reasonable attorney fees and costs339-E:3||Yes339-E:4||No339-E:2 & 339-E:6||Commissions must be paid on orders before termination§ 2A:61A-2If Sales Rep brings frivolous suit mfg. can recover attorney fees§ 2A:61A-3|
|New Jersey||New Jersey Annotated Statutes
|Must be paid within 30 days§ 2A:61A-2||Exemplary damages of 3 times amount of commissions owed§ 2A:61A-3||Actual and reasonable attorney fees and costs§ 2A:61A-3||Yes§ 2A:61A-5||No§ 2A:61A-6|
|New York||New York Consolidated Laws
|Yes§ 191-b 1||Yes, K must be signed by both parties and kept on file at mfg. for 3 years§ 191 b||Must be paid within 5 business days§ 191-c 1||Double damages§ 191-c 3||Prevailing party receives reasonable attorney fees and costs§ 191-c 3||Commissions must be paid at least monthly§ 191 cCommissions earned after termination must be paid§ 191-a (b)|
|North Carolina||General Statutes of North Carolina § 66-190||Yes§ 66-190.1||30 days after termination unless rep commits malfeasance§ 66-191||2 times damages§ 66-192(a)||Attorney fees actually and reasonably incurred and court costs§ 66-192(c)||Yes§ 66-192(c)||No§ 66-193||Commissions that come due after termination must be paid within 15 days§ 66-191|
|Oklahoma||Sales Representatives Recognition Act Oklahoma Statutes Annotated § 675||Yes§ 677 1||14 days after termination14 days on commissions that come due after termination§ 678 A||Prevailing party reasonable attorney fees and costs§ 678 B||Yes§ 679 A||No§ 679 B||Rep can recover all claims in OK case against mfg§ 679 C|
|Pennsylvania||Commissioned Sales Representatives Pennsylvania Statutes Annotated § 1471||Yes§ 1472||Yes§ 1475.1||14 days after termination§ 147314 days on commissions earned after termination§ 1474||2 times the commissions due§ 1475(a)(1)||Cost of the suit and reasonable attorney fees§ 1475(a)(2)||No§ 1476||If case is frivolous then mfg can recover reasonable attorney fees and costs§ 1475(b)|
|South Carolina||Payment Of Post-Termination Claims To Sales Representatives South Carolina Code of Laws § 39-65-10||Seems to be.§ 39-65-20||Yes§ 39-65-20||Paid as terms of the contract§ 39-65-20||Commissions due plus 3 times damages§ 39-65-30(1)||Actually and reasonably incurred attorney fees and court costs§ 39-65-30(2)||Yes§ 39-65-50||No§ 39-65-70||If the suit brought by the Rep is frivolous the mfg may recover attorney fees and costs§ 39-65-40Rep may bring all actions against mfg in SC§ 39-65-60|
|Tennessee||Tennessee Code Annotated § 47-50-114||Yes47-50-114 (b) (1)||Yes§ 47-50-114(b)(1)||14 days after termination§ 47-50-114(b)(c)||Mfg acting in bad faith liable for exemplary damages of treble the amount of commissions§ 47-50-114(d)||Reasonable attorney’s fees and court costs§ 47-50-114(d)||Yes§ 47-50-114(e)||No§ 47-50-114(f)||Commissions earned after termination must be paid within 14 days§ 47-50-114(b)(c)If action brought by Rep is frivolous mfg can recover attorney fees and court costs47-50-114(d)|
|Virginia||Code of Virginia § 59.1-455||Yes§ 59.1-456||Yes§ 59.1-457||Per contract but not later than 30 days§ 59.1-457||No§ 59.1-458||Post termination commissions must be paid within 30 days§ 59.1-457|
|Washington||Annotated Revised Code of Washington §49.48.150||Yes§49.48.160(1)||Yes§49.48.160(1)||Per contract but no later than 30 days§49.48.160(3)||Yes§49.48.180||No§49.48.160(1)
|All commissions including commissions earned by not due must be paid upon termination§49.48.160|
|Wisconsin||Wisconsin Statute § 134.93||Yes§ 134.93(3)||Due upon termination§ 134.93(4)||Exemplary damages 200% of the commission owed§ 134.93(5)||90 days written notice of termination must be given to rep§ 134.93(3)|
If you are a manufacturer, distributor or importer hiring independent reps, make sure you have a contract that protects you from being sued in 27 other states.
If you are a rep, insist on a contract with every manufacturer you represent.
Either way, you both will be better off.
What do you think? Leave a comment.
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LOUISIANA STATUTES ANNOTATED
LOUISIANA REVISED STATUTES
TITLE 51. TRADE AND COMMERCE
CHAPTER 1. IN GENERAL
PART 8. UNFAIR TRADE
SUBPART F. SALES REPRESENTATIVES
GO TO LOUISIANA STATUTES ARCHIVE DIRECTORY
La. R.S. 51:441 (2012)
§ 51:441. Definitions
(1) “Commission” means compensation paid a sales representative by a principal in an amount based on a percentage of the dollar amount of certain orders for or sales of the principal’s product.
(2) “Principal” means a person who:
(a) Repealed by Acts 1995, No. 487, § 2.
(b) Manufactures, produces, imports, or distributes a product for sale to customers who purchase the product for resale;
(c) Uses a sales representative to solicit orders for the product; and
(d) Compensates the sales representative in whole or in part by commission.
(3) “Sales representative” means a person who solicits, on behalf of a principal, orders for the purchase at wholesale of the principal’s product.
(4) “Termination” means the end of services performed by a sales representative for a principal whether by discharge, resignation, or expiration of a contract.
HISTORY: Acts 1988, No. 774, § 1, eff. July 18, 1988; Acts 1995, No. 487, §§ 1, 2.
§ 51:442. Contract
If there is a written contract between a principal and a sales representative under which the sales representative solicits wholesale orders within this state, it shall set forth the method by which the sales representative’s commission shall be computed and paid. The principal shall provide the sales representative with a copy of the contract.
§ 51:443. Payment of commissions; timely payment
Upon termination of any written or oral compensation agreement between a sales representative and a principal, the principal shall pay all commissions due the sales representative as specified in the agreement or, if not specified, no later than the thirtieth working day after the date of termination.
§ 51:444. Attorney fees and damages
A judgment or decree issued in any action brought by a sales representative for the payment of commissions by a principal may include payment by the principal of attorney fees and treble damages incurred by the sales representative.
§ 51:445. Certain venue provisions invalid
A. Any provision in a written or oral contract or agreement providing for the payment of commissions by a principal to a sales representative which purports to establish exclusive venue in a state other than Louisiana is hereby declared to be null and void and against the public policy of this state and such provision shall be void and unenforceable.
B. Any provision in a written or oral contract or agreement which requires waiver of this Section or which would frustrate or circumvent the provisions of this Section shall be null and void and of no force and effect.
C. A principal who is not a resident of this state and who enters into a contract subject to the provisions of this Subpart is considered to be doing business in this state for purposes of the exercise of personal jurisdiction over the principal.
D. The provisions of this Subpart do not invalidate or restrict any other right or remedy available to a sales representative or preclude a sales representative from seeking to recover in one action on all claims against a principal.
WordPress Tags: Louisiana,Sales,Representative,STATUTES,TITLE,TRADE,COMMERCE,CHAPTER,GENERAL,PART,UNFAIR,SUBPART,ARCHIVE,DIRECTORY,Definitions,Commission,compensation,percentage,dollar,product,Principal,person,Acts,Manufactures,sale,customers,Uses,Compensates,Termination,resignation,expiration,HISTORY,Contract,method,Payment,Upon,agreement,Attorney,judgment,action,Certain,venue,provision,policy,waiver,Section,purposes,jurisdiction
Maine Revised Statutes Annotated by LexisNexis(R)
TITLE 10. COMMERCE AND TRADE
PART 3. REGULATION OF TRADE
CHAPTER 210-A. SALES REPRESENTATIVE COMMISSION CONTRACTS
GO TO MAINE REVISED STATUTES ARCHIVE DIRECTORY
10 M.R.S. § 1341 (2012)
§ 1341. Definitions
As used in this chapter, unless the context otherwise indicates, the following terms have the following meanings.
1. COMMISSIONS. “Commissions” means compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the amount of orders or sales.
2. PRINCIPAL. “Principal” means a person, partnership, corporation or other business entity that does not have a permanent or fixed place of business in this State and that:
A. Manufactures, produces, imports or distributes a product for wholesale;
B. Contracts with sales representatives to solicit orders for the product; and
C. Compensates the sales representative, in whole or in part, by commission.
3. SALES REPRESENTATIVE. “Sales representative” means a person who:
A. Contracts with a principal to solicit orders for the purchase at wholesale of the principal’s product;
B. Is compensated, in whole or in part, by commission; and
C. Does not place orders or purchase for that person’s own account or for resale.
§ 1342. Notice of termination
Unless a contract between a sales representative and a principal provides otherwise, a party terminating the contract must give the other party 14 days’ written notice of the termination.
§ 1343. Contract
If a contract between a sales representative and a principal is terminated, the principal shall pay to the sales representative all commissions accrued under the contract within 30 days after the effective date of that termination. Any provision of any contract between a sales representative and a principal that purports to waive any provision of this chapter is void.
§ 1344. Civil liability
1. PRINCIPAL LIABILITY. A principal who fails to comply with the provisions of section 1343 is liable to the sales representative in a civil action for exemplary damages in an amount that does not exceed 3 times the amount of commissions due the sales representative, plus reasonable attorney’s fees and costs.
2. FRIVOLOUS ACTION. When the court determines that an action brought by a sales representative against a principal under this chapter is frivolous, the sales representative is liable to the principal for attorney’s fees actually and reasonably incurred by the principal in defending the action and court costs.
3. OTHER REMEDIES. Nothing in this chapter invalidates or restricts any other right or remedy available to a sales representative, or precludes a sales representative from seeking to recover in one action on all claims against a principal.
4. JURISDICTION. A principal who is not a resident of this State that contracts with a sales representative to solicit orders in this State is declared to be transacting business in this State for purposes of the exercise of personal jurisdiction over nonresidents under Title 14, section 704-A.
WordPress Tags: Maine,Sales,Representative,Statutes,LexisNexis,TITLE,COMMERCE,TRADE,PART,REGULATION,CHAPTER,COMMISSION,CONTRACTS,ARCHIVE,DIRECTORY,Definitions,context,meanings,COMMISSIONS,compensation,payment,percentage,PRINCIPAL,person,partnership,corporation,State,Manufactures,product,Compensates,Does,account,Notice,termination,Contract,provision,Civil,action,attorney,FRIVOLOUS,REMEDIES,JURISDICTION,purposes,nonresidents
Maryland Sales Representative
LABOR AND EMPLOYMENT
TITLE 3. EMPLOYMENT STANDARDS AND CONDITIONS
SUBTITLE 6. WHOLESALE SALES REPRESENTATIVES
GO TO MARYLAND STATUTES ARCHIVE DIRECTORY
Md. LABOR AND EMPLOYMENT Code Ann. § 3-601 (2012)
§ 3-601. Definitions
(a) In general. — In this subtitle the following words have the meanings indicated.
(b) Commission. — “Commission” means compensation that:
(1) is due to a sales representative from a principal; and
(2) accrues at:
(i) a specified amount for each order or sale; or
(ii) a rate expressed as a percentage of the dollar amount that a sales representative:
1. takes in orders for the principal;
2. makes in sales for the principal; or
3. earns in profits for the principal.
(c) Principal. — “Principal” means a sales corporation, partnership, proprietorship, or other business entity that:
(1) distributes, imports, manufactures, or produces a product for wholesale;
(2) enters into a contract with a sales representative to solicit a wholesale order for the product; and
(3) pays the sales representative wholly or partly by commission.
(d) Sales representative. —
(1) “Sales representative” means a person who:
(i) enters into a contract with a principal to solicit in the State a wholesale order; and
(ii) is paid wholly or partly by commission.
(2) “Sales representative” does not include a person who:
(i) buys a product or places an order for a product for resale by that person; or
(ii) sells or takes an order for the sale of a product to an ultimate buyer.
§ 3-602. Scope of subtitle
This subtitle does not apply to an individual who is considered under the Maryland Wage Payment and Collection Law to be employed by a principal.
§ 3-603. Void waivers
A provision of a contract that is made between a sales representative and a principal is void if the provision purports to waive any provision of this subtitle by:
(1) an express waiver; or
(2) a contract subject to the laws of another state.
§ 3-604. Payment of commission on termination of contract
Each principal shall pay to a sales representative all commissions that are due under a contract that is terminated, within 45 days after payment would have been due if the contract had not terminated.
§ 3-605. Action by sales representative
(a) Treble damages. —
(1) Subject to the requirement of paragraph (2) of this subsection, if a principal violates § 3-604 of this subtitle, a sales representative whom the violation affects is entitled to bring an action against the principal to recover up to 3 times the amount of all commissions that the principal owes to the sales representative.
(2) At least 10 days before an action is brought under this subsection, the sales representative shall give the principal written notice of intent to bring the action.
(b) Costs. — If a court determines that a sales representative is entitled to judgment in an action under this section, the court shall allow against the principal reasonable counsel fees and court costs.
§ 3-606. Personal jurisdiction
For purposes of personal jurisdiction under § 6-103 of the Courts Article, a principal who contracts with a sales representative to solicit wholesale orders for a product in the State is considered to be transacting business in the State.
§ 3-607. Revocable offer of commission
(a) Entitlement to commission. — If a principal makes a revocable offer of a commission to a sales representative who is not an employee of the principal, the sales representative is entitled to the commission agreed on if:
(1) the principal revokes the offer of commission and the sales representative establishes that the revocation was for the purpose of avoiding payment of the commission; or
(2) (i) the revocation occurs after the sales representative has obtained a written order for the principal’s product because of the efforts of the sales representative; and
(ii) the principal’s product that is the subject of the order is shipped to and paid for by a customer.
(b) Construction of section. — This section may not be construed to:
(1) impair the application of § 2-201 or § 2-209 of the Commercial Law Article;
(2) abrogate any rule of agency law; or
(3) unconstitutionally impair the obligations of contracts.
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ANNOTATED LAWS OF MASSACHUSETTS
PART I ADMINISTRATION OF THE GOVERNMENT
TITLE XV REGULATION OF TRADE
Chapter 104 Agents, Consignees and Factors
GO TO MASSACHUSETTS CODE ARCHIVE DIRECTORY
ALM GL ch. 104, § 7 (2012)
§ 7. Sales Representatives — Definitions.
The following terms as used in sections eight and nine, unless the context otherwise requires, shall have the following meanings:
“Commission”, compensation accruing to a sales representative for payment by a principal, earned through the last day on which services were performed by the sales representative, the rate of which is expressed as a percentage of the dollar amount of orders or sales.
“Principal”, a person who manufactures, produces, imports or distributes a product for wholesale; contracts to solicit orders for such product, and compensates individuals who solicit wholesale orders in whole or in part, by commission.
“Sales representative”, a person other than an employee, who contracts with a principal to solicit wholesale orders in the commonwealth and who is compensated, in whole or in part, by commission but shall not include one who places orders or purchases exclusively for his own account for resale.
“Day”, any calendar day, including Saturdays, Sundays and legal holidays.
“Termination”, the end of services performed by the sales representative for the principal whether by expiration of a contract, discharge or resignation.
§ 8. Sales Representatives — Commissions.
The terms of the contract between a principal and a sales representative shall determine when a commission shall be due. If the time when such commission shall be due is not specified in a contract, the past practices between the parties shall control or, if there are no such past practices, the custom and usage prevalent in the commonwealth for the business that is the subject of the relationship between the parties shall control. All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within fourteen days after the date of termination. Commissions that become due after the termination date shall be paid within fourteen days after the date on which the commissions became due.
§ 9. Sales Representatives — Commissions — Failure to Pay.
A principal who wilfully or knowingly fails to comply with provisions relating to the prompt payment of commissions set forth in section eight shall be liable to the sales representative in a civil action for the principal amount of the com-missions owed and for an additional sum up to three times the amount of commissions and for reasonable attorney’s fees and court costs. A principal who is not a resident of the commonwealth and who enters into a contract subject to the provisions of sections seven to nine shall be deemed to be doing business in the commonwealth for purposes of the exercise of personal jurisdiction over such principal. No provision of sections seven to nine may be waived, whether by express waiver or by an attempt to make a contract or agreement subject to the laws of another jurisdiction. A waiver of any provision of sections seven to nine shall be void.
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CHAPTER 181. EMPLOYMENT
PAYMENT OF WAGES
GO TO MINNESOTA STATUTES ARCHIVE DIRECTORY
Minn. Stat. § 181.13 (2012)
181.13 PENALTY FOR FAILURE TO PAY WAGES PROMPTLY
(a) When any employer employing labor within this state discharges an employee, the wages or commissions actually earned and unpaid at the time of the discharge are immediately due and payable upon demand of the employee. If the employee’s earned wages and commissions are not paid within 24 hours after demand, whether the employment was by the day, hour, week, month, or piece or by commissions, the employer is in default. The discharged employee may charge and collect the amount of the employee’s average daily earnings at the rate agreed upon in the contract of employment, for each day up to 15 days, that the employer is in default, until full payment or other settlement, satisfactory to the discharged employee, is made. In the case of a public employer where approval of expenditures by a governing board is required, the 24-hour period for payment does not commence until the date of the first regular or special meeting of the governing board following discharge of the employee.
(b) The wages and commissions must be paid at the usual place of payment unless the employee requests that the wages and commissions be sent through the mails. If, in accordance with a request by the employee, the employee’s wages and commissions are sent to the employee through the mail, the wages and commissions are paid as of the date of their postmark.
181.14 PAYMENT TO EMPLOYEES WHO QUIT OR RESIGN; SETTLEMENT OF DISPUTES
Subdivision 1. Prompt payment required.
(a) When any such employee quits or resigns employment, the wages or commissions earned and unpaid at the time the employee quits or resigns shall be paid in full not later than the first regularly scheduled payday following the employee’s final day of employment, unless an employee is subject to a collective bargaining agreement with a different provision. If the first regularly scheduled payday is less than five calendar days following the employee’s final day of employment, full payment may be delayed until the second regularly scheduled payday but shall not exceed a total of 20 calendar days following the employee’s final day of employment.
(b) Notwithstanding the provisions of paragraph (a), in the case of migrant workers, as defined in section 181.85, the wages or commissions earned and unpaid at the time the employee quits or resigns shall become due and payable within five days thereafter.
Subd. 2. Nonprompt payment. –Wages or commissions not paid within the required time period shall become immediately payable upon the demand of the employee. If the employee’s earned wages or commissions are not paid within 24 hours after the demand, the employer shall be liable to the employee for an additional sum equal to the amount of the employee’s average daily earnings provided in the contract of employment, for every day, not exceeding 15 days in all, until such payment or other settlement satisfactory to the employee is made.
Subd. 3. Settlement of disputes. –If the employer disputes the amount of wages or commissions claimed by the employee under the provisions of this section or section 181.13, and the employer makes a legal tender of the amount which the employer in good faith claims to be due, the employer shall not be liable for any sum greater than the amount so tendered and interest thereon at the legal rate, unless, in an action brought in a court having jurisdiction, the employee recovers a greater sum than the amount so tendered with interest thereon; and if, in the suit, the employee fails to recover a greater sum than that so tendered, with interest, the employee shall pay the cost of the suit, otherwise the cost shall be paid by the employer.
Subd. 4. Employees entrusted with money or property. –In cases where the discharged or quitting employee was, during employment, entrusted with the collection, disbursement, or handling of money or property, the employer shall have ten calendar days after the termination of the employment to audit and adjust the accounts of the employee before the employee’s wages or commissions shall be paid as provided in this section, and the penalty herein provided shall apply in such case only from the date of demand made after the expiration of the period allowed for payment of the employee’s wages or commissions. If, upon such audit and adjustment of the accounts of the employee, it is found that any money or property entrusted to the employee by the employer has not been properly accounted for or paid over to the employer, as provided by the terms of the contract of employment, the employee shall not be entitled to the benefit of sections 181.13 to 181.171, but the claim for unpaid wages or commissions of such employee, if any, shall be disposed of as provided by existing law.
Subd. 5. Place of payment. –Wages and commissions paid under this section shall be paid at the usual place of payment unless the employee requests that the wages and commissions be sent to the employee through the mails. If, in accordance with a request by the employee, the employee’s wages and commissions are sent to the employee through the mail, the wages and commissions shall be deemed to have been paid as of the date of their postmark for the purposes of this section.
181.145 PROMPT PAYMENT OF COMMISSIONS TO COMMISSION SALESPEOPLE
Subdivision 1. Definitions. –For the purposes of this section, “commission salesperson” means a person who is paid on the basis of commissions for sales and who is not covered by sections 181.13 and 181.14 because the person is an independent contractor. For the purposes of this section, the phrase “commissions earned through the last day of employment” means commissions due for services or merchandise which have actually been delivered to and accepted by the customer by the final day of the salesperson’s employment.
Subd. 2. Prompt payment required.
(a) When any person, firm, company, association, or corporation employing a commission salesperson in this state terminates the salesperson, or when the salesperson resigns that position, the employer shall promptly pay the salesperson, at the usual place of payment, commissions earned through the last day of employment or be liable to the salesperson for the penalty provided under subdivision 3 in addition to any earned commissions unless the employee requests that the commissions be sent to the employee through the mails. If, in accordance with a request by the employee, the employee’s commissions are sent to the employee through the mail, the commissions shall be deemed to have been paid as of the date of their postmark for the purposes of this section.
(b) If the employer terminates the salesperson or if the salesperson resigns giving at least five days’ written notice, the employer shall pay the salesperson’s commissions earned through the last day of employment on demand no later than three working days after the salesperson’s last day of work.
(c) If the salesperson resigns without giving at least five days’ written notice, the employer shall pay the sales-person’s commissions earned through the last day of employment on demand no later than six working days after the salesperson’s last day of work.
(d) Notwithstanding the provisions of paragraphs (b) and (c), if the terminated or resigning salesperson was, during employment, entrusted with the collection, disbursement, or handling of money or property, the employer has ten working days after the termination of employment to audit and adjust the accounts of the salesperson before the salesperson can demand commissions earned through the last day of employment. In such cases, the penalty provided in subdivision 3 shall apply only from the date of demand made after the expiration of the ten working day audit period.
Subd. 3. Penalty for nonprompt payment. –If the employer fails to pay the salesperson commissions earned through the last day of employment on demand within the applicable period as provided under subdivision 2, the employer shall be liable to the salesperson, in addition to earned commissions, for a penalty for each day, not exceeding 15 days, which the employer is late in making full payment or satisfactory settlement to the salesperson for the commissions earned through the last day of employment. The daily penalty shall be in an amount equal to 1/15 of the salesperson’s commissions earned through the last day of employment which are still unpaid at the time that the penalty will be assessed.
Subd. 4. Amount of commission disputed.
(a) When there is a dispute concerning the amount of the salesperson’s commissions earned through the last day of employment or whether the employer has properly audited and adjusted the salesperson’s account, the penalty provided in subdivision 3 shall not apply if the employer pays the amount it in good faith believes is owed the salesperson for commissions earned through the last day of employment within the applicable period as provided under subdivision 2; except that, if the dispute is later adjudicated and it is determined that the salesperson’s commissions earned through the last day of employment were greater than the amount paid by the employer, the penalty provided in subdivision 3 shall apply.
(b) If a dispute under this subdivision is later adjudicated and it is determined that the salesperson was not promptly paid commissions earned through the last day of employment as provided under subdivision 2, the employer shall pay reasonable attorney’s fees incurred by the salesperson.
Subd. 5. Commissions earned after last day of employment. –Nothing in this section shall be construed to impair a commission salesperson from collecting commissions on merchandise ordered prior to the last day of employment but delivered and accepted after termination of employment. However, the penalties prescribed in subdivision 3 apply only with respect to the payment of commissions earned through the last day of employment.
181.171 COURT ACTIONS; PRIVATE PARTY CIVIL ACTIONS
Subdivision 1. Civil action; damages. –A person may bring a civil action seeking redress for violations of sections 181.02, 181.03, 181.031, 181.032, 181.08, 181.09, 181.10, 181.101, 181.11, 181.12, 181.13, 181.14, 181.145, and 181.15 directly to district court. An employer who is found to have violated the above sections is liable to the aggrieved party for the civil penalties or damages provided for in the section violated. An employer who is found to have violated the above sections shall also be liable for compensatory damages and other appropriate relief including but not limited to injunctive relief.
Subd. 2. District court jurisdiction. –An action brought under subdivision 1 may be filed in the district court of the county wherein a violation is alleged to have been committed, where the respondent resides or has a principal place of business, or any other court of competent jurisdiction.
Subd. 3. Attorney fees and costs. –In an action brought under subdivision 1, the court shall order an employer who is found to have committed a violation to pay to the aggrieved party reasonable costs, disbursements, witness fees, and attorney fees.
Subd. 4. Employer; definition. –“Employer” means any person having one or more employees in Minnesota and includes the state and any political subdivision of the state. This definition applies to this section and sections 181.02, 181.03, 181.031, 181.032, 181.06, 181.063, 181.10, 181.101, 181.13, 181.14, and 181.16.
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MICHIGAN COMPILED LAWS SERVICE
CHAPTER 600 REVISED JUDICATURE ACT OF 1961
REVISED JUDICATURE ACT OF 1961
CHAPTER 29. PROVISIONS CONCERNING SPECIFIC ACTIONS
Go to the Michigan Code Archive Directory
MCLS § 600.2961 (2012)
MCL § 600.2961
§ 600.2961. Definitions; determining when commission due; payment of commissions; liability; attorney fees and costs; jurisdiction; contract waiver void; applicability of section.
Sec. 2961. (1) As used in this section:
(a) “Commission” means compensation accruing to a sales representative for payment by a principal, the rate of which is expressed as a percentage of the amount of orders or sales or as a percentage of the dollar amount of profits.
(b) “Person” means an individual, corporation, partnership, association, governmental entity, or any other legal entity.
(c) “Prevailing party” means a party who wins on all the allegations of the complaint or on all of the responses to the complaint.
(d) “Principal” means a person that does either of the following:
(i) Manufactures, produces, imports, sells, or distributes a product in this state.
(ii) Contracts with a sales representative to solicit orders for or sell a product in this state.
(e) “Sales representative” means a person who contracts with or is employed by a principal for the solicitation of orders or sale of goods and is paid, in whole or in part, by commission. Sales representative does not include a person who places an order or sale for a product on his or her own account for resale by that sales representative.
(2) The terms of the contract between the principal and sales representative shall determine when a commission becomes due.
(3) If the time when the commission is due cannot be determined by a contract between the principal and sales representative, the past practices between the parties shall control or, if there are no past practices, the custom and usage prevalent in this state for the business that is the subject of the relationship between the parties.
(4) All commissions that are due at the time of termination of a contract between a sales representative and principal shall be paid within 45 days after the date of termination. Commissions that become due after the termination date shall be paid within 45 days after the date on which the commission became due.
(5) A principal who fails to comply with this section is liable to the sales representative for both of the following:
(a) Actual damages caused by the failure to pay the commissions when due.
(b) If the principal is found to have intentionally failed to pay the commission when due, an amount equal to 2 times the amount of commissions due but not paid as required by this section or $100,000.00, whichever is less.
(6) If a sales representative brings a cause of action pursuant to this section, the court shall award to the prevailing party reasonable attorney fees and court costs.
(7) In an action brought under this section, jurisdiction shall be determined in accordance with chapter 7.
(8) A provision in a contract between a principal and a sales representative purporting to waive any right under this section is void.
(9) This section does not affect the rights of a principal or sales representative that are otherwise provided by law.
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