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State Laws Regulating Manufacturer &
Rep Agreements
Time limit to pay commissions
Within 30 days after the date of termination of contract; if commissions become due after termination date, within 30 days after they become due.
Penalty for non-compliance
Triple damages plus reasonable attorney’s fees and costs.
Is a written contract required?
No
Legal reference
Code of Alabama 1975, Sections 8-24-1 through 8-24-5.
Time limit to pay commissions
All commissions earned and unpaid through the time of termination are due within 30 days of termination. Commissions due for all orders placed but delivered after termination.
Penalty for non-compliance
Damages plus attorney’s fees and court costs.
Is a written contract required?
Yes, if required by either party.
Legal reference
Title 44, Chapter 11, Article 15, Arizona revised statutes.
Time limit to pay commissions
Within 30 working days after termination if there is no written agreement.
Penalty for non-compliance
Liable in a civil action for three times damages sustained by the sales representative plus attorney’s fees and costs.
Is a written contract required?
Yes
Legal reference
Arkansas Code, Sections 4-70-301 through 4-70-306.
Time limit to pay commissions
As specified in a written contract.
Penalty for non-compliance
Liable in a civil action for treble damages, plus attorney’s fees and court costs.
Is a written contract required?
Yes — No Exceptions
Legal reference
State of California Civil Code Title 1A, Section 1738.10, Part 4, Division 3.
Time limit to pay commissions
As specified in a written contract.
Penalty for non-compliance
Liable in a civil action for treble damages, plus attorney’s fees and court costs.
Is a written contract required?
No
Legal reference
Colorado Revised Statutes Title 12, Section 12-66-101 through 103.
Time limit to pay commissions
Within 14 days of termination of the contract.
Penalty for non-compliance
Commission amount plus exemplary damages up to twice the commissions owed; plus reasonable attorney’s fees.
Is a written contract required?
Yes
Legal reference
Official Florida Statutes, Section 686.201.
Time limit to pay commissions
Within 14 days if there is no written contract; within the time frame of the agreement if there is a written contract.
Penalty for non-compliance
Commission amount plus exemplary damages up to 2 times the commission amount and reasonable attorney’s fees.
Is a written contract required?
Yes.
Legal reference
Official Code of Georgia Annotated, Article 24, Sections 10-1-700 through 10-1-704.
Time limit to pay commissions
Within 13 days of termination or 13 days when commissions are earned.
Penalty for non-compliance
Up to three times the commission amount plus reasonable attorney’s fees and court costs.
Is a written contract required?
No
Legal reference
Illinois Revised Statutes, Chapter 48, paragraphs 2251, 2252 and 2253.
Time limit to pay commissions
Within 14 days after payment would have been due under the contract.
Penalty for non-compliance
Exemplary damages up to 3 times the sum of the commission owed; plus reasonable attorney’s fees and costs.
Is a written contract required?
No
Legal reference
Indiana Code, 1988 Edition, Sections 24-4-7-1 through 24-4-7-6.
Time limit to pay commissions
Within 30 days after commissions earned. Upon termination within 30 days after termination.
Penalty for non-compliance
Commissions due plus liquidated damages (5% of commission due x number of days past due) including court costs and attorney’s fees.
Is a written contract required?
No
Legal reference
Code of Iowa, Vol. 1. 1989, Chapter 91A, Sections 91A.1 through 91A.13.
Time limit to pay commissions
Within 30 days after commissions are earned.
Penalty for non-compliance
The commission amount.
Is a written contract required?
No
Legal reference
Kansas Statutes Annotated. 1987 Cumulative Supplement, Chapter 44, Article 3, Sections 44-341
Time limit to pay commissions
Within 30 days after the effective date of termination.
Penalty for non-compliance
Commission due plus exemplary damages not to exceed two times commissions due plus attorney’s fees and court costs. If the court finds the sales rep’s action is frivolous the principal will be awarded court costs and attorney’s fees.
Is a written contract required?
No
Legal reference
Kentucky Revised Statutes, Chapter 371. Sections 371.370-371.375 and 371.380-371.385.
Time limit to pay commissions
As specified in the written agreement. If there is no written contract all commissions due must be paid no later than the 30 working days after termination.
Penalty for non-compliance
Triple damages plus attorney’s fees and costs.
Is a written contract required?
No — But if you have a written contract it must set forth the method of commission computation and payment, and the representative must be given a copy.
Legal reference
Louisiana Revised Statutes (West. 1988), Title 51, R.S. 51:441 through 445.
Time limit to pay commissions
All commissions accrued under the contract within 30 days after the effective date of the termination.
Penalty for non-compliance
A principal who fails to comply with the provisions on payment upon termination is liable to the sales representative in a civil action for exemplary damages up to an amount of three times the commissions due, plus attorney’s fees and court costs.
If a frivolous action is brought, the sales representative is liable to the principal for attorney’s fees and court costs.
A nonresident principal who contracts with a sales representative to solicit orders in the state is declared to be transacting business in the state for purposes of the exercise of personal jurisdiction.
Nothing in the act invalidates or restricts any other right or remedy available to a sales representative.
Is a written contract required?
No
Legal reference
N/A
Time limit to pay commissions
Within 45 days after payment would have been due if the contract had not been terminated.
Penalty for non-compliance
Exemplary damages not to exceed 3 times the commissions owed plus court costs provided the principal is furnished 10 days prior written notice of intent to file civil action for exemplary damages.
Is a written contract required?
No
Legal reference
Annotated Code Maryland, Article 100, Sections 127 through 131.
Time limit to pay commissions
Within 7 days after termination or expiration of the agreement; or within 14 days for goods shipped after termination or expiration of the agreement.
Penalty for non-compliance
The commission amount.
Is a written contract required?
Yes, but only if either party requests it.
Legal reference
Massachusetts General Laws Annotated (West, 1988), Chapter 104, Sections 7 through 9.
Time limit to pay commissions
When due by contract or within 45 days after termination.
Penalty for non-compliance
Actual damages plus if found to have intentionally failed to pay, an amount equal to 2 times the commission due, not to exceed $100,000; plus attorney’s fees and court costs to the prevailing party.
Is a written contract required?
No
Legal reference
Michigan compiled laws section 600.2961.
Time limit to pay commissions
Within 3 working days of the salesperson’s last day of work.
Penalty for non-compliance
Commission amount plus 1/15th of commission for every day of non-payment up to 15 days; plus reasonable attorney’s fees.
Is a written contract required?
No
Legal reference
Minnesota Statutes 1988, Chapter 181. Sections 181.13, 181.14 and 181.145. and Minnesota Statutes 1990, Regulation of Trade Practices Section 325E.37.
SPECIAL NOTE
Minnesota also requires 90 days written notice for termination of Representative contracts made after August 1, 1990. The notice must include reasons for non-renewal and 60 days must be allowed to correct any deficiencies. There are penalties for non-compliance but they must be settled by arbitration and cannot be pursued in a court of law.
Time limit to pay commissions
Within 21 days after the effective date of termination.
Penalty for non-compliance
Up to triple the commission due plus reasonable attorney’s fees and costs.
Is a written contract required?
No
Legal reference
1988 Mississippi General Laws, Chapter 588, Sections 75-87-1, 75-87-3, 75-87-5, and Notes.
Time limit to pay commissions
When the contract is terminated, within 14 days for all commissions presently due and within 14 days after the date of termination when due.
Note: Commissions are deemed due as specified in the written agreement. If there is no written agreement, all commissions due must be paid as per the past practice between the parties. If past practice cannot be used to clearly ascertain when the commission becomes due, then the commission shall be due on the date the principal accepts the order unless the custom and usage prevalent in the state for the parties’ particular industry is different, in which event such custom and usage shall prevail.
Penalty for non-compliance
Commission due, an additional amount as if the sales representative were still earning commissions calculated on an annualized pro rata basis from the date of termination to the date of payment, and reasonable attorney’s fees and costs.
Is a written contract required?
No
Legal reference
House Bill 219, Section 407.023.
Time limit to pay commissions
On all orders delivered and all orders on file with the employer at the time of termination of employment less any orders returned or canceled at the time suit is filed.
Penalty for non-compliance
An amount equal to the judgment, but if nonpayment of commissions is found to be willful, an amount equal to two times the amount of unpaid commissions.
Is a written contract required?
No
Legal reference
Nebraska Revised Statutes, Vol. 3b, Section 48-1229 through 48-1232.
Time limit to pay commissions
All commissions must be paid within 45 calendar days of termination.
Penalty for non-compliance
In a civil action damages plus exemplary damages, plus attorney’s fees and court costs.
Is a written contract required?
Yes
Legal reference
State of New Hampshire revised statutes annotated Section 339, E1 through E4.
Time limit to pay commissions
Commissions earned and due are payable within 7 days of termination. All other commissions must be paid within 30 days after payment would have been due if the contract had not been terminated.
Penalty for non-compliance
Amount due representative plus reasonable attorney’s fees and court costs. If the court finds the sales rep’s action frivolous the principal will be awarded attorney’s fees and court costs.
Is a written contract required?
No
Legal reference
Laws of New Jersey 1990, Chapter 93, effective 9/7/90.
Time limit to pay commissions
Within 5 business days after termination or when the commission is earned.
Penalty for non-compliance
Two times the commission amount; plus reasonable attorney’s fees, court costs and disbursements.
Is a written contract required?
Yes
Legal reference
Labor Law Book No. 30, Chapter 451, Sections 191-a, 191-b, and 191-c.
Time limit to pay commissions
All commissions accrued must be paid within 45 days of the effective date of termination.
Penalty for non-compliance
In a civil action all commission due, plus exemplary damages not to exceed all commissions due, plus attorney’s fees and court costs. If the court finds the sales rep’s action frivolous, the rep is liable for attorney’s fees and court costs.
Is a written contract required?
No
Legal reference
General statutes of the State of North Carolina Chapter 66, Section 190 through 193.
Time limit to pay commissions
Must be specified in written contract. If there is no written contract the usual and customary practice between principles and reps shall prevail. Upon termination all commissions due must be paid within 13 days or within 13 days after they become due.
Penalty for non-compliance
Liable in civil action for triple damages plus reasonable attorney’s fees and costs.
Is a written contract required?
No, but strongly recommended.
Legal reference
Ohio Revised Code 1988, Section 1335.11.
Time limit to pay commissions
Within 14 days of termination plus commissions due after termination must be paid within 14 days of the date on which they become due.
Penalty for non-compliance
Commissions due plus attorney’s fees and court costs to the prevailing party.
Is a written contract required?
No
Legal reference
Oklahoma Statutes, Section 677 title 15.
Time limit to pay commissions
All commissions accrued under the contract within 14 days after the effective date of the termination.
Penalty for non-compliance
A principal who fails to comply with the provision of the statute is liable to the sales representative in a civil action for: (1) all amounts due the sales representative under the contract plus interest on the amount due at the rate of 9% annum until paid; and (2) treble damages, if the failure to comply with the provisions of the statute is willful.
The court shall also award court costs and attorney fees actually and reasonably incurred by the prevailing party in an action to recover amounts, interest, or damages due.
A nonresident principal contracts with a sales representative to solicit orders in the state is subject to the jurisdiction of the state’s courts.
Nothing in the act invalidates or restricts any additional right or remedy available to a sales representative.
Is a written contract required?
NO
Legal reference
N/A
Time limit to pay commissions
On termination within 14 days after payment would have been due if the contract had not been terminated. Goods ordered prior to termination but shipped after termination within 14 days after payment would have been due.
Penalty for non-compliance
In a civil action for all commissions plus exemplary damages not to exceed two times the commissions due plus reasonable attorney and court costs. If the court finds the action frivolous the principal can be awarded attorney’s fees and court costs.
Is a written contract required?
Yes — This law applies to all current at will contracts and to all contracts entered into or renewed after the effective date.
Legal reference
Laws of 1988, Act 184.
Time limit to pay commissions
As required by contract or upon termination if there is no written contract.
Penalty for non-compliance
Liable in a civil action for all amounts due sales representatives plus punitive damages not to exceed three times the commissions due plus attorney’s fees and court costs. If the court finds the sales rep’s action is frivolous the principal will be awarded court costs and attorney’s fees.
Is a written contract required?
No
Legal reference
Cumulative Supplement of Code of Laws of South Carolina, Vol. 13A, Chapter 65, pg. 59 and 60, Sections 39-65-10 through 39-65-80.
Time limit to pay commissions
Within 14 days of the salesperson’s termination.
Penalty for non-compliance
Up to three times the commission amount; plus reasonable attorney’s fees and court costs.
Is a written contract required?
Yes
Legal reference
Tennessee Code Annotated, Section 47-50-114.
Time limit to pay commissions
Must be specified in written contract. If there is no written contract all commissions due shall be paid within 30 working days after termination date.
Penalty for non-compliance
Liable in a civil action for triple damages plus reasonable attorney’s fees and costs.
Is a written contract required?
Yes
Legal reference
Texas Business and Commerce Code Annotated (Vernon, 1987), Section 35.81 through 35.86.
Time limit to pay commissions
All earned commissions must be paid in accordance with the period specified in the contract, but not more than 30 days from the date of termination or, in the case of orders processed subsequent to termination, 30 days from shipment.
Penalty for non-compliance
The statute does not specify any penalty.
Is a written contract required?
Yes
Legal reference
N/A
Time limit to pay commissions
When normally due under contract if written or reasonable and customary if a verbal agreement, but no later than 30 days after manufacturer is paid. Upon termination, all commissions due plus those earned but not due, must be paid within 30 days of termination.
Penalty for non-compliance
In a civil suit three times the amount of damages due plus attorney’s fees and court cost.
Is a written contract required?
Yes
Legal reference
Revised code of the State of Washington, Title 49; 48 Sections 1 through 7.
Time limit to pay commissions
All commission that are due to the independent sales representative at the time of termination, cancellation, or nonrenewal of the contract between the principal and the independent sales representative.
Penalty for non-compliance
A principal that fails to pay a commission due an independent sales representative as required by the statute is liable to the independent sales representative for the amount of the commissions due and for exemplary damages of not more than 200% of the amount of the commissions due. In addition, the principal shall pay the independent sales representative all actual costs, including reasonable actual attorney’s fees, incurred by the independent sales representative in bringing an action, obtaining a judgment, and collecting a judgment under the statute.
No penalty provision is set forth for a violation of the provision requiring that a principal provide an independent sales representative with 90 days prior written notice of a termination, cancellation, or substantial change in competitive circumstances of the contract, unless otherwise provided in the written contract between the parties.
Is a written contract required?
No
Legal reference
N/A
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