Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Can an employer change employees compensation from 100% Salary to 100% Commission? The employees in question are currently salary exempt employees. They are not inside or outside sales people, but the time they spend on projects is billed to customers. This happened selectively to a few employees only. Of course the big problem is that there is no work right now to earn commissions on. No billable hours = No Pay.
Sure sounds to me like the company is trying to force the employees to quit instead of laying them off and having to pay higher unemployment taxes. I think the employees can quit voluntarily for "good cause" and then draw unemployment.
It's completely legal, although I agree, not terribly ethical. I'm not sure if it would be compensable under u/e if someone quit under those circumstances--I see it as very grey and up to the hearing officer.
It's completely legal, although I agree, not terribly ethical. I'm not sure if it would be compensable under u/e if someone quit under those circumstances--I see it as very grey and up to the hearing officer.
If it's legal to change any non-sales salaried position to 100% commission knowing that will effectively end the employees ability to earn any wages, why wouldn't all employers use this tactic instead of laying off people and raising their unemployment tax rate?
I doubt the employer that's doing this is the only unethical one around!
Check with your state unemployment office. In Texas, if you can prove that the something substantially and materially changed from the original conditions of your hire, you can be eligible for unemployment. Sounds to me like going from a salary to no pay is "substantial and material".
If it's legal to change any non-sales salaried position to 100% commission knowing that will effectively end the employees ability to earn any wages, why wouldn't all employers use this tactic instead of laying off people and raising their unemployment tax rate?
I doubt the employer that's doing this is the only unethical one around!
Well let's see. To being with, not everyone is in sales. Next, not all employers are unethical.
My guess is one of three things:
The employer is hoping the dead weight will leave;
The employer can't afford to continue to carry salaried employees who aren't contributing to the bottom line, whether it's their fault or not;
The employer is just unethical.
You should contact the department of labor in your state. Also, depending of what the actual duties are (and if the employer has more than 25 employee's), the employer may be in violation of the Fair Labor Standards Act (FLSA). FLSA regulations are very clear on how you can legally classify an employee in regards to how they are paid.
N.C. Department of Labor
Compliance Assistance By Law - The Fair Labor Standards Act (FLSA) (http://www.dol.gov/compliance/laws/comp-flsa.htm - broken link)
Well let's see. To being with, not everyone is in sales. Next, not all employers are unethical.
My guess is one of three things:
The employer is hoping the dead weight will leave;
The employer can't afford to continue to carry salaried employees who aren't contributing to the bottom line, whether it's their fault or not;
The employer is just unethical.
True, not everyone is in sales. In fact, in this case the employees are NOT sales people. They are (oops were) in salaried positions where they received no commission. Now, they are becoming 100% commission employees, but are not in positions within the company where they even have the ability to generate sales!
Also true that not all employers are unethical. From what I know of this company, their business has dried up in the present economic conditions. I'm sure they don't relish letting employees go because of it. My issue is that they should "man up" and layoff the employees in question instead of making a change to their pay plan that guarantees they will receive no pay. Let the employees apply for the unemployment they are entitled to if they are unable to find other jobs. BTW, the unemployment rate is this county and state are well ABOVE the national average. Finding another job will be difficult if not impossible.
True, not everyone is in sales. In fact, in this case the employees are NOT sales people. They are (oops were) in salaried positions where they received no commission. Now, they are becoming 100% commission employees, but are not in positions within the company where they even have the ability to generate sales!
I'm not sure how a non-sales job gets commission. Bonus, sure. Commission? Based on what? No snarkiness intended, that just doesn't make sense--could you explain?
I'm not sure how a non-sales job gets commission. Bonus, sure. Commission? Based on what? No snarkiness intended, that just doesn't make sense--could you explain?
I'll try.......
The company told the employees that they now would receive "commission" based on the hours they worked on projects for customers instead of a salary. This change was not made across the board for all the employees in the department with the same duties/job descriptions, only about half. There are sales positions in the company that are paid on a commission structure. The employees in question were not transferred to this department or assigned other duties. Nothing changes except their pay structure.
Perhaps the company used the wrong verbage when they said "commission". Perhaps they should have called it a "billable" hours pay plan since the employees in question will submit their hours worked, by customer, each pay period. I've worked for a company where this was done. Of course, I agreed to that pay structure when I took the job.
I understand that many companies are in a tough position in this economy. No one likes to let people go. But, if they have to, the least they can do for the people affected is to do it in an above board manner. In my opinion, this company has failed that test. They clearly want the employees to quit instead of laying them off and effecting their unemployment rates.
Sounds like your boss has turned your dept into a room full of sub-contractors.
I see a few things here...
- your company is in damage control mode.
- I see layoffs in the future, and outsourcing. (I'll call you if I need you, and if I don't call you, you don't get paid.)
Is there a lot of dead weight in your company?
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
