Are internal company cash sales contests subject to state laws?

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Are internal company cash sales contests subject to state laws?

I worked for a company for 2 years and was recently let go. While I was an employee, there was a team sales contest with a large cash prize. My team won and I was informed by my supervisor that I and the rest of the team would be receiving the reward. Since that time, my employment was terminated. The company is saying that I am now not entitled to any portion of the winnings but will not provide me with any contest rules stating why I am not entitled to any winnings.

Asked on August 18, 2010 under Employment Labor Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

What your rights are in circumstances like this will depend on the terms of the contest and your award. It is legal, for example, for a sales contest, bonus, commission plan, etc. to specify that the money will only be paid if the employee is still an employee at the time of payment. And conversely, it is fully legal for employees to be entitled to it regardless of their employment status. So the key is  what the terms or conditions are. If there were no terms or conditions, a good argument could be made that once an employee is told he or she is entitled to the money, it is theirs--that the saying so was de facto saying that payment will not be based on employment status. Of course, if your former company doesn't want to pay you, you may need to litigate against them to try to compel them to do so; if it's enough money to make consulting with an attorney worthwhile, you should do so.


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