LRB-2262/2
GMM:mfd:jf
1997 - 1998 LEGISLATURE
June 24, 1997 - Introduced by Representatives Urban, Vrakas, Hoven, Turner,
Duff, Powers, M. Lehman, R. Young, Johnsrud, Musser, Cullen, Schneider,
Goetsch, Porter, Black, L. Young, Ott, Albers, Notestein, F. Lasee, Kaufert,
Springer, Plale, Hahn, Baldwin and Riley, cosponsored by Senators
Grobschmidt, Huelsman, Shibilski, Farrow and
Roessler. Referred to
Committee on Labor and Employment.
AB438,1,10
1An Act to renumber 109.01 (1);
to amend 109.01 (3), 109.01 (4), 109.03 (2),
2109.03 (3), 109.03 (4), 109.03 (5), 109.03 (6), 109.03 (7) (title), 109.09 (1), 109.09
3(2), 109.11 (1) (a), 109.11 (2) (a), 109.11 (2) (b), 109.11 (3), chapter 135 (title),
4135.01, 135.02 (intro.), 135.025 (1), 135.025 (2) (intro.), 135.025 (3), 135.05,
5135.06, 135.065 and 135.07 (intro.); and
to create 109.01 (1m), 109.01 (1p),
6109.03 (2g), 109.03 (2m), 109.03 (4g), 109.11 (1m), subchapter I (title) of chapter
7135 [precedes 135.01] and subchapter II of chapter 135 [precedes 135.20] of the
8statutes;
relating to: the payment of wages and commissions owed to employes
9and commission salespersons whose employment ends, the termination or
10alteration of sales representative agreements and providing penalties.
Analysis by the Legislative Reference Bureau
Under current law, an employer, including the state, must pay an employe
whose employment ends and to whom wages are owed within certain time periods
depending on the circumstances under which the employment ends. Specifically, an
employe, except a sales agent employed on a commission basis, not having a written
contract for a definite period, who quits his or her employment or who is discharged
from employment must be paid in full by no later than the date on which the employe
regularly would have been paid under the employer's established payroll schedule
or, subject to certain exceptions, within 31 days after the employment ends,
whichever is earlier. Also, in the case of an employe who dies, the full amount of the
employe's wages due must be paid to the employe's spouse, child or other dependent
on demand. In addition, if an employe is separated from the payroll of the employer
as a result of the employer merging, liquidating, ceasing business operations or
relocating, the employer must pay all unpaid wages to the employe within 24 hours
after the time of separation.
Under current law, an employe who has a wage claim may file the wage claim
with the department of workforce development (DWD), which may attempt to settle
and compromise the wage claim or sue the employer on the employe's behalf to collect
the wage claim, or the employe may commence an action in circuit court in his or her
own behalf to collect the wage claim without first filing the wage claim with DWD.
If a wage claim action is commenced in circuit court before DWD has completed its
attempt to settle and compromise the claim, the circuit court may order the employer
to pay, in addition to the amount of wages unpaid and in addition to or in lieu of any
criminal penalties for which the employer may be liable, increased wages of not more
than 50% of the amount of wages unpaid. If a wage claim action is commenced in
circuit court after DWD has completed its attempt to settle and compromise the
claim, the circuit court may order the employer to pay, in addition to the amount of
wages unpaid and in addition to or in lieu of any criminal penalties for which the
employer may be liable, increased wages of not more than 100% of the amount of
wages unpaid.
This bill extends the wage payment law to commission salespersons whose
employment ends. Specifically, the bill requires an employer, including the state, to
pay wages as follows:
1. To an employe, including a sales agent employed on a commission basis other
than an insurance agent, not having a written contract for a definite period, who is
discharged from employment immediately upon the demand of the employe.
2. To an employe, including a sales agent employed on a commission basis other
than an insurance agent, not having a written contract for definite period, who quits
or resigns his or her employment on demand by no later than 5 days after the employe
quits or resigns.
3. To an employe, including a sales agent employed on a commission basis other
than an insurance agent, having a written contract for definite period, who gives not
less than 5 days' notice of his or her intention to quit or resign his or her employment
on demand by no later than 24 hours after the employe quits or resigns.
4. To an employe, including a sales agent employed on a commission basis other
than an insurance agent, having a written contract for a definite period, who gives
less than 5 days' notice of his or her intention to quit or resign his or her employment
on demand by no later than the date on which the employe regularly would have been
paid under the employer's established payroll schedule or, subject to certain
exceptions, within 31 days after the employment ends, which ever is earlier.
5. To a commission salesperson, other than an insurance agent or broker, who
is an independent contractor rather than an employe (commission salesperson) and
who gives not less than 5 days' written notice of his or her intention to resign his or
her position or whose contract of employment is terminated, cancelled or
nonrenewed by the employer on demand by no later than 3 working days after the
commission salesperson's last day of employment.
6. To a commission salesperson who gives less than 5 days' notice of his or her
intention to resign his or her position on demand by no later than 6 working days
after the commission salesperson's last day of employment.
7. To the spouse, child or other dependent of a commission salesperson who dies
on demand.
8. To a commission salesperson who is separated from the payroll of an
employer as a result of the employer merging, liquidating, ceasing business
operations or relocating on demand by no later than 24 hours after the time of
separation.
Under the bill, the wages to which a commission salesperson is entitled on the
ending of his or her employment are all commissions earned though the last day of
employment, which is defined in the bill as commissions owed for any sale of goods
made by the commission salesperson and approved by the employer on or before the
last day of employment or for any sale of services made by the commission
salesperson and delivered to and accepted by the customer on or before the last day
of employment.
Also, under the bill, if the employe or commission salesperson whose
employment ends was entrusted with money or property, the employer has 10
working days after the employe's or commission salesperson's last day of
employment to audit and adjust the accounts of the employe or commission
salesperson. In that case, the employe or commission salesperson may not demand
his or her wages until after the expiration of the 10-day period.
In addition, under the bill, if an employer fails to pay an employe, on demand,
within the applicable time period specified in the bill, DWD or a circuit court may
order the employer to pay to the employe, in addition to the amount of wages due and
unpaid and in addition to or in lieu of the increased wages and criminal penalties
specified under current law, increased wages in the amount of the employe's average
daily earnings for each day for which the employer is late in paying the employe's
wages. Similarly, if an employer fails to pay a commission salesperson, on demand,
within the applicable time period specified in the bill, DWD or a circuit court may
order the employer to pay to the commission salesperson, in addition to the amount
of wages due and unpaid and in addition to or in lieu of the increased wages and
criminal penalties specified under current law, increased wages in the amount of
one-fifteenth of the commission salesperson's commissions earned through the last
day of employment that remain unpaid for each day for which the employer is late
in paying the commission salesperson's wages.
Under current law, no person who grants a dealership (grantor), that is, a
contract by which a dealer is granted the right to sell or distribute goods or services
or to use a trade name, trademark, service mark, logotype, advertising or other
commercial symbol, may terminate, cancel, fail to renew or substantially change the
competitive circumstances of the dealership without good cause, that is, failure by
the dealer to comply substantially with essential, reasonable and nondiscriminatory
requirements imposed by the grantor or bad faith by the dealer. Also, under current
law, a grantor must give a dealer 90 days' notice of termination, cancellation,
nonrenewal or substantial change in competitive circumstances, stating the reasons
for that action and giving the dealer 60 days in which to rectify any claimed
deficiency, except that, if the reason for that action is the nonpayment of sums due
under the dealership agreement, the dealer has only 10 days to cure the default and
that, if the reason for the action is the dealer's insolvency, bankruptcy or an
assignment for the benefit of creditors, the notice provisions do no apply.
This bill provides similar coverage for sales representative agreements, that is,
contracts by which a sales representative is granted the right to represent, sell or
offer for sale the goods of a manufacturer, wholesaler or importer by use of a trade
name, trademark, service mark, logotype, advertising or other commercial symbol.
The bill defines a "sales representative" as a person who contracts with a principal
to solicit wholesale orders, that is, orders for goods to be ultimately sold at retail, and
who is compensated by commission, but excludes from that definition an employe of
the principal, a person who purchases goods for his or her own account for resale, a
person who holds goods on consignment for resale, a person who sells goods to end
users and not for resale and a person who is an insurance agent or broker.
Under the bill, no manufacturer, wholesaler or importer may terminate, cancel,
fail to renew or substantially change the competitive circumstances of a sales
representative agreement without good cause, which is defined in the bill as any of
the following:
1. A material breach of a written sales representative agreement.
2. In the absence of a written sales representative agreement, a failure by the
sales representative to comply with any material, reasonable and nondiscriminatory
requirements of the manufacturer, wholesaler or importer.
3. The nonpayment of any sums due under the sales representative agreement.
4. The bankruptcy or insolvency of the sales representative.
5. An assignment for the benefit of creditors or similar disposition of the assets
of the sales representative's business.
6. The voluntary abandonment by the sales representative of his or her
business with no provision made for the resumption of that business by the sales
representative or for the continuation of that business by a transferee of the sales
representative.
7. The conviction of the sales representative for any offense the circumstances
of which substantially relate to the circumstances of the sales representative's
business.
8. Any act by the sales representative that materially impairs the good will
associated with the manufacturer's, wholesaler's or importer's trade name,
trademark, service mark, logotype, advertising or other commercial symbol.
In addition, under the bill, a manufacturer, wholesaler or importer must give
a sales representative 90 days' notice of termination, cancellation, nonrenewal or
substantial change in competitive circumstances, stating the reasons for that action
and giving the sales representative 60 days in which to rectify any claimed deficiency,
except that, if the reason for that action is the nonpayment of sums due under the
sales representative agreement, the sales representative has only 10 days to cure the
default and that, if the reason for that action is any of the reasons specified in items
4. to 8. above, the notice provisions do not apply.
Finally, the bill requires a manufacturer, wholesaler or importer who cancels,
terminates or fails to renew a sales representative agreement to pay the sales
representative for all sales made by the sales representative and approved by the
manufacturer, wholesaler or importer on or before the effective date of that action
as provided in the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB438, s. 2
3Section
2. 109.01 (1m) of the statutes is created to read:
AB438,5,74
109.01
(1m) "Commission salesperson" means a person, other than an
5insurance agent or broker, who is paid on the basis of commissions for sales and who
6is not covered under s. 109.03 (2) or (2g) because the person is an independent
7contractor rather than an employe.
AB438, s. 3
8Section
3. 109.01 (1p) of the statutes is created to read:
AB438,5,149
109.01
(1p) "Commissions earned through the last day of employment" means
10commissions due a commission salesperson for any sale of goods made by the
11commission salesperson and approved by the employer on or before the commission
12salesperson's last day of employment or for any sale of services made by the
13commission salesperson and delivered to and accepted by the customer on or before
14the commission salesperson's last day of employment.
AB438, s. 4
1Section
4. 109.01 (3) of the statutes is amended to read:
AB438,6,92
109.01
(3) "Wage" or "wages" mean remuneration payable to an employe
or
3commission salesperson for personal services, including salaries, commissions,
4commissions earned through the last day of employment, holiday and vacation pay,
5overtime pay, severance pay or dismissal pay, supplemental unemployment
6compensation benefits when required under a binding collective bargaining
7agreement, bonuses and any other similar advantages agreed upon between the
8employer and the employe
or commission salesperson or provided by the employer
9to the
employer's employes
or commission salespersons as an established policy.
AB438, s. 5
10Section
5. 109.01 (4) of the statutes is amended to read:
AB438,6,1311
109.01
(4) "Wage deficiency" means the difference between the amount
12required by law to be paid and the amount actually paid to an employe
or commission
13salesperson.
AB438, s. 6
14Section
6. 109.03 (2) of the statutes is amended to read:
AB438,6,2115
109.03
(2) (title)
Payment to discharged
or resigned employes. Any Subject
16to sub. (4g), any employe,
except including a sales agent employed on a commission
17basis
other than an insurance agent, not having a written contract for a definite
18period, who
quits employment or who is discharged from employment shall be paid
19in full
by no later than the date on which the employe regularly would have been paid
20under the employer's established payroll schedule or the date of payment required
21under sub. (1), whichever is earlier immediately on the demand of the employe.
AB438, s. 7
22Section
7. 109.03 (2g) of the statutes is created to read:
AB438,7,223
109.03
(2g) Payment to resigned employes. (a) Subject to sub. (4g), any
24employe, including a sales agent employed on a commission basis other than an
25insurance agent, not having a written contract for a definite period, who quits or
1resigns his or her employment shall be paid in full on demand by no later than 5 days
2after the employe quits or resigns his or her employment.
AB438,7,83
(b) 1. Subject to sub. (4g), any employe, including a sales agent employed on a
4commission basis other than an insurance agent, having a written contract for a
5definite period, who gives his or her employer not less than 5 days' written notice of
6his or her intention to quit or resign his or her employment shall be paid in full on
7demand by no later than 24 hours after the employe quits or resigns his or her
8employment.
AB438,7,159
2. Subject to sub. (4g), any employe, including a sales agent employed on a
10commission basis other than an insurance agent, having a written contract for a
11definite period, who gives his or her employer less than 5 days' written notice of his
12or her intention to quit or resign his or her employment shall be paid in full on
13demand by no later than the date on which the employe regularly would have been
14paid under the employer's established payroll schedule or the date of payment
15required under sub. (1), whichever is earlier.
AB438, s. 8
16Section
8. 109.03 (2m) of the statutes is created to read:
AB438,7,2317
109.03
(2m) Payment to terminated or resigned commission salesperson. (a)
18Subject to subs. (4) and (4g), any commission salesperson who gives his or her
19employer not less than 5 days' written notice of his or her intention to resign his or
20her position or whose contract of employment is terminated, canceled or nonrenewed
21by the employer shall be paid all commissions earned through the last day of
22employment on demand by no later than 3 working days after the commission
23salesperson's last day of employment.
AB438,8,324
(b) Subject to sub. (4g), any commission salesperson who gives his or her
25employer less than 5 days' written notice of his or her intention to resign his or her
1position shall be paid all commissions earned through the last day of employment on
2demand by no later than 6 working days after the commission salesperson's last day
3of employment.
AB438, s. 9
4Section
9. 109.03 (3) of the statutes is amended to read:
AB438,8,235
109.03
(3) (title)
Payment upon death of employe or commission salesperson. 6In Subject to sub. (4g), in case of the death of an employe
or commission salesperson 7to whom wages are due, the full amount of the wages due shall
upon on demand be
8paid by the employer to the spouse,
children child, or other dependent living with
9such the employe
or commission salesperson at the time of death. In the case of an
10employe
or commission salesperson of the state, the amount of the wage due includes
11all unused vacation allowance. Any county or municipality may include unused
12vacation allowances for any employe
or commission salesperson who died after
13January 1, 1961. An employer may, not less than 5 days after the death of an employe
14or commission salesperson and before the filing of a petition for letters testamentary
15or of administration in the matter of the decedent's estate, make
payments payment 16of the wage due the deceased employe
or commission salesperson to the spouse,
17children child, parent, brother or sister of the decedent, giving preference in
the
18foregoing that order; or, if
no such none of those relatives survive, the employer may
19apply
such that payment or so much
thereof of that payment as may be necessary to
20paying creditors of the decedent in the order of preference prescribed in s. 859.25 for
21satisfaction of debts by executors and administrators. The making of payment in
22such that manner shall be a discharge and release of the employer
as to the amount
23of
such that payment.
AB438, s. 10
24Section
10. 109.03 (4) of the statutes is amended to read:
AB438,9,9
1109.03
(4) (title)
Payment to certain separated employes and commission
2salespersons. Whenever Subject to sub. (4g), if an employe
or commission
3salesperson is separated from the payroll of an employer as a result of the employer
4merging, liquidating or otherwise disposing of the business, ceasing business
5operations in whole or in part, or relocating all or part of the business to another area
6within or without the state, the employer, or the successors in interest of the
7employer, shall pay all unpaid wages to the employe
or commission salesperson at
8the usual place of payment
within on demand by no later than 24 hours
of after the
9time of separation.
AB438, s. 11
10Section
11. 109.03 (4g) of the statutes is created to read:
AB438,9,2111
109.03
(4g) Payment to employes or commission salespersons entrusted with
12money or property. Notwithstanding subs. (2), (2g), (2m), (3) and (4), if the
13discharged, terminated, resigned, deceased or separated employe or commission
14salesperson, during his or her employment, was entrusted with the collection,
15disbursement or handling of money or property, the employer shall have 10 working
16days after the employe's or commission salesperson's last day of employment to audit
17and adjust the accounts of the employe or commission salesperson before the
18employe or commission salesperson may demand his or her wages. In cases covered
19under this subsection, the penalties specified in s. 109.11 (1m) shall apply only from
20the date of demand made after the expiration of the 10 working days allowed for audit
21and adjustment.
AB438, s. 12
22Section
12. 109.03 (5) of the statutes is amended to read:
AB438,9,2523
109.03
(5) Enforcement. Except as provided in sub. (1), no employer may by
24special contract with
employes an employe or a commission salesperson or by any
25other means secure exemption from this section. Each employe shall have a right
1of action against any employer for the full amount of the employe's wages due on each
2regular pay day as provided in
this section sub. (1) and for increased wages as
3provided in s. 109.11 (2),
and each employe and commission salesperson shall have
4a right of action against any employer for the full amount of the employe's or
5commission salesperson's wages due as provided in sub. (2), (2g), (2m), (3), (4) or (4g),
6whichever is applicable, and for increased wages as provided in s. 109.11 (1m) and
7(2), in any court of competent jurisdiction. An employe
or commission salesperson 8may bring an action against an employer under this subsection without first filing
9a wage claim with the department under s. 109.09 (1). An employe
or commission
10salesperson who brings an action against an employer under this subsection shall
11have a lien upon all property of the employer, real or personal, located in this state
12as described in s. 109.09 (2).
AB438, s. 13
13Section
13. 109.03 (6) of the statutes is amended to read:
AB438,10,1914
109.03
(6) Wage claim. In an action by an employe
, a commission salesperson 15or the department against
the an employer on a wage claim, no security for payment
16of costs is required. In any
such proceeding action on a wage claim the court may
17allow the prevailing party, in addition to all other costs, a reasonable sum for
18expenses. No person other than an employe
, commission salesperson or the
19department shall be benefited or otherwise affected by this subsection.
AB438, s. 14
20Section
14. 109.03 (7) (title) of the statutes is amended to read:
AB438,10,2121
109.03
(7) (title)
Protection of employes
and commission salespersons.
AB438, s. 15
22Section
15. 109.09 (1) of the statutes is amended to read:
AB438,11,2023
109.09
(1) The department shall investigate and attempt equitably to adjust
24controversies between employers and employes
or commission salespersons as to
25alleged wage claims. The department may receive and investigate any wage claim
1which is filed with the department, or received by the department under s. 109.10
2(4), no later than 2 years after the date the wages are due. The department may, after
3receiving a wage claim, investigate any wages due from the employer against whom
4the claim is filed to any employe
or commission salesperson during the period
5commencing 2 years before the date the claim is filed. The department shall enforce
6this chapter and ss. 66.293, 103.02, 103.49, 103.82 and 104.12. In pursuance of this
7duty, the department may sue the employer on behalf of the employe
or commission
8salesperson to collect any wage claim or wage deficiency and ss. 109.03 (6) and 109.11
9(1m), (2) and (3) shall apply to such actions. Except for
actions a wage claim or wage
10deficiency under s. 109.10, the department may refer
such an action a wage claim or
11wage deficiency to the district attorney of the county in which the violation
occurs 12occurred for prosecution and collection and the district attorney shall commence an
13action in the circuit court having appropriate jurisdiction. Any number of wage
14claims or wage deficiencies against the same employer may be joined in a single
15proceeding, but the court may order separate trials or hearings. In actions that are
16referred to a district attorney under this subsection, any taxable costs recovered by
17the district attorney shall be paid into the general fund of the county in which the
18violation
occurs occurred and used by that county to meet its financial responsibility
19under s. 978.13 (2) for the operation of the office of the district attorney who
20prosecuted the action.
AB438, s. 16
21Section
16. 109.09 (2) of the statutes is amended to read:
AB438,12,1722
109.09
(2) The department, under its authority under sub. (1) to maintain
23actions for the benefit of employes
and commission salespersons, or an employe
or
24commission salesperson who brings an action under s. 109.03 (5) shall have a lien
25upon all property of the employer, real or personal, located in this state for the full
1amount of any wage claim or wage deficiency. A lien under this subsection takes
2effect when the department
or, employe
or commission salesperson files a verified
3petition claiming the lien with the clerk of the circuit court of the county in which the
4services or some part of the services were performed
, pays the fee specified in s.
5814.61 (5) to that clerk of circuit court and serves a copy of that petition on the
6employer by personal service in the same manner as a summons is served under s.
7801.11 or by certified mail with a return receipt requested. The department
or, 8employe
or commission salesperson must file the petition within 2 years after the
9date
that on which the wages were due. The petition shall specify the nature of the
10claim and the amount claimed, describe the property upon which the claim is made
11and state that the petitioner claims a lien on that property. The lien shall take
12precedence over all other debts, judgments, decrees, liens or mortgages against the
13employer, except a lien under s. 292.31 (8) (i), 292.41 (6) (d) or 292.81, and may be
14enforced in the manner provided in ss. 779.09 to 779.12, 779.20 and 779.21, insofar
15as
such those provisions are applicable. The lien ceases to exist if the department
16or, the employe
or commission salesperson does not bring an action to enforce the lien
17within the period prescribed in s. 893.44 for the underlying wage claim.
AB438, s. 17
18Section
17. 109.11 (1) (a) of the statutes is amended to read:
AB438,12,2319
109.11
(1) (a) In adjusting a controversy between an employer and an employe
20or commission salesperson as to an alleged wage claim filed with the department
21under s. 109.09 (1), the department may compromise and settle that wage claim for
22such a sum
as may be
that is agreed upon between the department, the employe
or
23commission salesperson and the employer.
AB438, s. 18
24Section
18. 109.11 (1m) of the statutes is created to read:
AB438,13,9
1109.11
(1m) Late payment penalties. (a) If an employer fails to pay any wages
2due an employe, on demand, within the time period specified in s. 109.03 (2), (2g),
3(3), (4) or (4g), whichever is applicable, the department or a circuit court, subject to
4par. (c), may order the employer to pay to the employe, in addition to the amount of
5wages due and unpaid and in addition to or in lieu of any increased wages specified
6in sub. (1) (b) or (2) (a) or (b) or criminal penalties specified in sub. (3), increased
7wages in the amount of the employe's average daily earnings for each day for which
8the employer is late in paying those wages or in compromising and settling the wage
9claim to the satisfaction of the employe.
AB438,13,1910
(b) If an employer fails to pay any wages due a commission salesperson, on
11demand, within the time period specified in s. 109.03 (2m) (3), (4) or (4g), whichever
12is applicable, the department or a circuit court, subject to par. (c), may order the
13employer to pay to the commission salesperson, in addition to the amount of wages
14due and unpaid and in addition to or in lieu of any increased wages specified in sub.
15(1) (b) or (2) (a) or (b) or criminal penalties specified in sub. (3), increased wages in
16the amount of one-fifteenth of the commission salesperson's commissions earned
17through the last day of employment that remain unpaid for each day for which the
18employer is late in paying those wages or in compromising and setting the wage
19claim to the satisfaction of the commission salesperson.