Although the New Jersey Representatives’ Rights Act is a statute that is unknown to many people, it serves as an important layer of protection for independently commissioned salesmen even after their contracts end. Essentially, it ensures that these sales representatives are paid their commissions and their entitled compensation within a period of 30 days after the termination of their contracts. This entitlement holds regardless of the reason for the termination of the contract.
This statute was passed back in 1990 and has been providing legal protection to independent sales representatives against their principal in the case where they might not be paid their entitled commissions. The act mandates that failure of the principal to comply and pay their contracted sales representatives would result in them having to pay three times the original commission. This also includes the legal costs incurred.
The act also creates an incentive for the principal to make rapid payments while ensuring that the sales representatives do not have to fork out money to pay litigation fees. It allows them to claim these costs from the principal that is in breach of the rights act. Furthermore, it prevents employers from terminating the contracts of sales representatives so that they can avoid paying them their entitled bonuses. However, one important thing to note is that the statute only protects independent contractors and not employees.