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Independent Sales Representatives: Are You Owed Unpaid Commissions?

Many sales contractors are unaware of a New Jersey statute that protects their right to timely payment of sales commissions they stood to receive prior to termination of their contract, or their discharge or resignation. The statute, known as the New Jersey Sales Representatives’ Rights Act, specifically entitles independent sales representatives to commissions they earned within 30 days of the date their contract terminated, or within 30 days after the date the commissions were due, whichever is later. The law even entitles sales representatives to commissions on goods merely ordered on or before the last day of their contract, even if the order might have been accepted by their principal, delivered, and paid for after their termination. Even a contractual waiver of unpaid commissions is void and unenforceable under the Act

A company found to have violated the Act is liable to pay the sales representative exemplary damages of three times the amount of commissions owed to the sales representative, plus all attorney’s fees and court costs associated with pursuing the commissions. The purpose of this provision is to encourage aggrieved sales representatives to exercise their rights under the law, even if their commission amount owed is low, or they are otherwise worried about legal expenses.

Are you protected under the Act? The law defines a “sales representative” as an independent sales company or individual person (not an employee) who contracts with a principal to solicit orders of goods or services to retailers or other non-consumers, and is compensated at least in part by a commission. A “principal” is any business or person, even one not physically located in New Jersey, who 1) manufactures, produces, imports or distributes a product or offers a service within the state; 2) contracts with sales representatives to solicit orders for the product or service; and 3) compensates those sales representatives at least in part by a commission.

Considering the above definitions, if you believe you are a sales representative owed pre-termination commissions, you may be protected under the New Jersey Sales Representatives’ Rights Act. Therefore, if you so much as suspect you might be owed unpaid commissions, you should contact an attorney to further understand your legal rights. The employment attorneys at Piro Zinna Cifelli Paris & Genitempo, LLC can help you exercise your rights as an aggrieved salesperson. For more information, call our office for a free consultation at (973) 542-2766 or click here to fill out our online intake form.

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