Final Paycheck in New York: When It Is Due, and Your Vacation and Commissions

Take a hypothetical. An inside sales representative at a building-supply distributor in Ronkonkoma is paid a salary every other Friday and a commission on the orders she books, paid monthly. She has eight unused vacation days. She gives two weeks’ notice and leaves on a Wednesday. Her last check arrives on the next regular payday with her salary through Wednesday, no vacation pay, no commission on the orders she booked in her final month, and a $350 deduction marked “equipment” for a laptop the company says came back damaged.

Our Long Island wage and hour lawyers handle claims on every one of those lines; this guide takes them in the order they appear on the last pay stub. It is general information, not advice about any one claim.

When the last paycheck is due

Labor Law § 191(3) is short: “If employment is terminated, the employer shall pay the wages not later than the regular pay day for the pay period during which the termination occurred, as established in accordance with the provisions of this section. If requested by the employee, such wages shall be paid by mail.” The statute speaks of employment that is “terminated” and draws no line between a resignation and a firing. The Department of Labor’s guidance says: “When employment has ended, the employer must pay the wages by the regular payday for the pay period worked.”

The regular payday depends on the kind of work. Manual workers are generally paid weekly; clerical and other workers “not less frequently than semi-monthly, on regular pay days designated in advance by the employer”; commission salespeople as their agreement provides, but at least monthly. The pay notice you signed at hiring was required to state your regular payday.

The statute has no exception for holding the last check until you return a laptop or sign a release. If the regular payday passes, the wages are late. Ask for the check by mail in an email, and keep the email.

Unused vacation depends on the written policy

Vacation pay is a “benefit or wage supplement”: Labor Law § 198-c(2) defines that term to include “vacation, separation or holiday pay.” Section 190(1) counts benefits and wage supplements as wages “except for the purposes of sections one hundred ninety-one and one hundred ninety-two,” so the payday deadline above does not govern vacation pay. An employer that agreed to provide the benefit and fails to pay it “within thirty days after such payments are required to be made” commits a misdemeanor.

New York does not require paid vacation at all. The Department of Labor’s guidance says payment for time not worked “is not required unless the employer has established a policy to grant such pay,” and an employer that creates one “is free to impose any conditions they choose.” At the end of a job, the question is what the policy says.

The leading case is Matter of Glenville Gage Co. v Industrial Board of Appeals, 70 AD2d 283 (3d Dept 1979), affirmed by the Court of Appeals on the Appellate Division’s opinion, 52 NY2d 777 (1980). The employer’s notice said, in capitals, “ALL EMPLOYEES WHO ARE TERMINATED OR QUIT BEFORE VACATION PERIODS FORFEIT THEIR VACATION PAY.” Five employees left after becoming eligible for vacation but before the vacation period. The Industrial Board of Appeals held the forfeiture void as against public policy; the Appellate Division annulled that ruling: “All that is required by section 198-c is that an employer abide by the terms of his agreement to provide benefits.” The employees knew of the company’s practice, even though the two who testified denied any knowledge of the notice.

The Department of Labor reads Glenville Gage with a condition: “To be valid, the employer must have told employees, in writing, of the conditions that nullify the benefit.” If you earned vacation time and “there is no written forfeit policy,” then “the employer must pay the employee for the accrued vacation.” Separately, Labor Law § 195(5) requires every employer to give employees its vacation policy “in writing or by publicly posting” it. With no written policy at all, the Department says an oral policy or past practice “may be enforced - if the terms of the policy can be confirmed through an investigation.”

So before you leave, ask them about the vacation policy. Get it in writing, in an email. And if the employer doesn’t have a written policy that states that when you leave, you lose your vacation, the Labor Department says that the employer has to pay you for the vacation you earned. An oral promise or a past practice can count too because oral agreements for wages are generally enforceable, but you gotta be able to prove it. So you gotta watch what you say and you gotta document better. Write down who told you, when they told you, and keep that in an email. Don’t just rely on your memory.

Commissions follow your commission agreement

Earned commissions are wages; Labor Law § 190(1) covers earnings “determined on a time, piece, commission or other basis.” The harder question is when a commission is earned. In Pachter v Bernard Hodes Group, 10 NY3d 609 (2008), the Court of Appeals held that, absent a governing written instrument, the answer is “regulated by the parties’ express or implied agreement; or, if no agreement exists, by the default common-law rule that ties the earning of a commission to the employee’s production of a ready, willing and able purchaser of the services.”

If your principal activity is selling, the Labor Law requires a writing. Section 191(1)(c) says the terms must be “reduced to writing, signed by both the employer and the commission salesperson,” including “details pertinent to payment of wages, salary, drawing account, commissions and all other monies earned and payable in the case of termination of employment by either party.” If the employer cannot produce that writing when the Labor Commissioner asks, the statute presumes the terms are the ones the salesperson presents. On written request, the employer must also give you “a statement of earnings paid or due and unpaid.”

For the Ronkonkoma rep, the final month’s orders turn on her plan: whether a commission is earned when the order is booked, when it ships or when the customer pays, and what happens at termination. A plan that is silent on termination lacks what the statute requires. A bonus is a separate question with its own case law, covered in our guide to losing a bonus by leaving before the payout. Ask for the earnings statement in writing the week you leave.

What can come out of the last check

Labor Law § 193(1) bars any deduction from wages except those made under a law or regulation and those “expressly authorized in writing by the employee and are for the benefit of the employee,” such as insurance premiums, health benefits and union dues. An overpayment caused by a clerical or mathematical error, or a pay advance, can be recovered only under the Labor Commissioner’s regulations, with notice before the recovery begins. The employer also may not “require an employee to make any payment by separate transaction unless such charge or payment is permitted as a deduction from wages.”

The Department of Labor’s list of illegal deductions starts with “Breakages,” “Cash shortages,” “Fines” and “Losses to the business.” The $350 laptop charge is a breakage. A signed form agreeing to pay for damaged equipment does not fit the statute’s list either, because the written authorizations it allows are for payments “for the benefit of the employee.” Consequently, ask for the $350 back in writing.

The whole last pay stub, with each rule and its source, fits on one card.

Two doors, and which one fits your claim

Every remedy above comes through one of two doors: a complaint to the Department of Labor, which investigates under Labor Law § 196-a, or your own lawsuit for damages under § 198.

You have to know which door is administrative and which is a lawsuit for damages. A complaint to the Labor Department is the administrative door; the government does the work. The problem with the Labor Department is that it will not take a claim for commissions from sales, and it will not take wages owed more than three years back. So what are your damages? The wages you were not paid plus liquidated damages of 100 percent unless the employer can prove a good faith basis, plus interest and attorney’s fees. That is the lawsuit under Labor Law section 198, and it reaches back six years.

The Department’s claim page lists what it will not accept, and two items are common at the end of a job: claims for “commissions from sales” and wages owed “from more than three years.” The main items are in the first card below; it also will not take a wage supplement claim until 30 days have passed since it became due.

The lawsuit has no such list. Section 198(3) gives every employee the right to recover “full wages, benefits and wage supplements and liquidated damages accrued during the six years previous to the commencing of such action,” and an investigation by the Department is “not a prerequisite.” The duty to post the vacation policy is enforced by the Department with a civil penalty; § 198 gives you no damages for it. Your damages claim is the vacation pay itself.

Consequently, a commission claim, and anything older than three years, belongs in court.

Fired after you asked about your pay

Asking where your vacation pay went is protected when you reasonably and in good faith believe the employer broke the Labor Law. Labor Law § 215 bars firing or penalizing an employee who complained to the employer about conduct the employee “reasonably and in good faith, believes violates any provision of this chapter,” and the complaint “need not make explicit reference to any section or provision of this chapter.” Section 740 protects disclosing to a supervisor, or objecting to, a practice the employee “reasonably believes is in violation of law, rule or regulation,” and it covers former employees, including actions “that would adversely impact a former employee’s current or future employment.”

The remedies are in the third card above, with two years to sue under each statute. Section 215 does not reach state or municipal employees, who look to Civil Service Law § 75-b. Our wage theft retaliation guide covers how those claims are built. In practice, make the pay complaint in an email, not in the hallway.

The first week after you leave

If you were let go, our guide to collecting unemployment after a firing covers the benefits claim, which runs on its own clock. If a severance agreement is offered, read the release before you sign it.

Bring these to the first call:

• The final pay stub and the two before it, with the deductions visible.
• The vacation or paid-time-off policy, the handbook page, and the date you received it.
• Your commission plan or signed commission agreement, and the last commission statements.
• The termination letter or your resignation email, and any notice of when your benefits ended.
• Any email in which you asked about the missing pay, and the reply.

Back to the rep in Ronkonkoma

Her salary arrived on time. The eight vacation days turn on the handbook: Glenville Gage enforced a forfeiture rule the employees knew about, the Department requires that the rule be in writing, and without a written forfeiture rule the Department says the days must be paid. The commissions turn on her plan. The $350 is a breakage deduction. She should ask in writing for the earnings statement and the vacation policy, keep every stub, and calendar six years from each missed payment. Our Long Island wage and hour practice handles each of those claims.

Sources

• Labor Law § 190, definitions: https://www.nysenate.gov/legislation/laws/LAB/190
• Labor Law § 191, frequency of payments: https://www.nysenate.gov/legislation/laws/LAB/191
• Labor Law § 193, deductions from wages: https://www.nysenate.gov/legislation/laws/LAB/193
• Labor Law § 195, notice and record-keeping: https://www.nysenate.gov/legislation/laws/LAB/195
• Labor Law § 196-a, complaints to the commissioner: https://www.nysenate.gov/legislation/laws/LAB/196-A
• Labor Law § 198, costs and remedies: https://www.nysenate.gov/legislation/laws/LAB/198
• Labor Law § 198-c, benefits or wage supplements: https://www.nysenate.gov/legislation/laws/LAB/198-C
• Labor Law § 215, prohibited retaliation: https://www.nysenate.gov/legislation/laws/LAB/215
• Labor Law § 218, civil penalties: https://www.nysenate.gov/legislation/laws/LAB/218
• Labor Law § 740, retaliatory action by employers: https://www.nysenate.gov/legislation/laws/LAB/740
• Civil Service Law § 75-b: https://www.nysenate.gov/legislation/laws/CVS/75-B
• Matter of Glenville Gage Co. v Industrial Bd. of Appeals, 70 AD2d 283 (3d Dept 1979): https://static.case.law/ad2d/70/cases/0283-01.json
• Matter of Glenville Gage Co. v Industrial Bd. of Appeals, 52 NY2d 777 (1980): https://static.case.law/ny-2d/52/cases/0777-01.json
• Pachter v Bernard Hodes Group, Inc., 10 NY3d 609 (2008): https://www.nycourts.gov/reporter/3dseries/2008/2008_05300.htm
• New York State Department of Labor, Wages and Hours FAQ: https://dol.ny.gov/wages-and-hours-frequently-asked-questions
• New York State Department of Labor, Unpaid/Withheld Wages and Wage Supplements: https://dol.ny.gov/unpaidwithheld-wages-and-wage-supplements
• New York State Department of Labor, Illegal Deductions: https://dol.ny.gov/illegal-deductions

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If your last paycheck in New York came without your vacation pay or your commissions, or with a deduction you never agreed to, call (516) 750-0595 with your final pay stub in hand, or request a free case review.