Sales Quotas and Termination
Brokers’ Rights • FLSA Requirements • New York Lawyers
Smaller brokerage houses and financial products companies sometimes hold out the possibility of full-time employment if an unpaid trainee broker meets a certain quota of cold call sales over a given period of time. While each case is different, unpaid trainee brokers typically have a six-month period during which time they must successfully facilitate a set number of sales over the phone. If a trainee broker fails to meet the sales quota specified, he or she is essentially let go without the prospect of future employment – be that paid or unpaid.
These kinds of practices are in violation of the Fair Labor Standards Act link, specifically as it relates to minimum wage and overtime requirements. In fact, brokerage houses and firms are often able to recruit unpaid trainee brokers by holding out the promise of potential future employment, where work experience – while unpaid – serves as the “compensation” offered during the training period.
At the New York law offices of Leeds Brown Law and Virginia & Ambinder, we are familiar with the tactics used by brokerage houses and financial services companies when recruiting trainee brokers and denying them minimum wage. To learn how we can help you recover what is owed you, contact brokers’ rights attorneys at Leeds Brown Law and Virginia & Ambinder today.
Unpaid Trainee Brokers and Employment Contracts
In some cases, an unpaid trainee broker may be asked to sign a contract where there is an understanding that the trainee broker will eventually obtain a Series 7 license. In order to get a Series 7 license, a trainee must fill out a U 4 form that validates the broker’s affiliation with a licensed Broker Dealer. In this way, the trainee broker can verify an affiliation with a FINRA registered Brokerage house or firm.
In other cases, unpaid trainee brokers are considered independent contractors. Here, however, unlicensed trainee brokers cannot do the very things they are are contracted to do since they do not have a brokers license under the Financial Industry Regulatory Authority (FINRA). In these kinds of cases, it’s difficult not to conclude that employers simply classify unpaid trainee brokers as independent contractors in an attempt to avoid paying them minimum wage in the requirements of the Fair Labor Standards Act.
Contact New York Brokers’ Rights Attorneys
A fair number of small brokerage houses and financial products companies used unpaid trainee brokers in order to make cold calls. In many cases, these employers simply follow what they believe is a standard industry practices of not paying trainees. However, in do so, they are in violation of the minimum wage and overtime requirements of the FLSA, regardless of any employment contract they might have asked a trainee broker to sign.
To learn how we can help you recover compensation owed you, contact New York brokers’ rights attorneys at Leeds Brown Law and Virginia & Ambinder today.