Can my employer change my incentive plan because I exceeded my yearly goal?

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Can my employer change my incentive plan because I exceeded my yearly goal?

I had a set goal to attain for the year and I landed a big sale that exceeded my overall goal. After the sale was completed they came back to me and said they were adjusting my goal because this was not accounted for in the plan. Basically they reduced my commission payment by 65% of what it should have been.

Asked on July 31, 2015 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If you had a written incentive plan, they cannot change the terms of the plan during the period of time covered by that plan (though they of course can do so going forward). That's because such a written plan would most likely constitute a contract, and a written contract may onky be changed if both parties agree to the change (or if the contract itself contains provisions otherwise allowing a change). In the event of a written plan, you can likely enforce the plan in court, through a lawsuit, if necessary. But if you did not have a written plan, just an oral or verbal promise of some incentive, a court would likely find such a promise to be a "gratuitous promise" and unenforceable.


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