Can an employer change the basis upon which a sales employee is hired, from salary to commission based earnings?

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Can an employer change the basis upon which a sales employee is hired, from salary to commission based earnings?

An employee, at the company where I work, was hired as a Sales Manager for $55K/annum. After being hired the employee was given an unrealistic goal, considering the company had just lost Wal-Mart (over 50% of their business) and this year has been tough economically, to raise sales by 50% within one year. The employee has raised sales by 25%, but the employer is upset and wants to pay her a commission based salary rather than the agreed salary. This would reduce her earnings to an estimated $20K. Is the employer allowed to make this change? Nothing is in writing and signed by both parties

Asked on June 17, 2009 under Employment Labor Law, Pennsylvania

Answers:

B. B., Member, New Jersey Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

I'm not a Pennsylvania attorney, and I don't have all of the facts of this employee's situation.  There are differences in the law, from one state to another, and sometimes seemingly small facts play a big part in the outcome.  This employee needs a local attorney, for advice she can rely on, and one place to look for counsel is our website, http://attorneypages.com

Based on the question's facts alone, and most states' law, I'd say that the employer is free to cut her pay to whatever he wants, going forward, but he can't refuse to pay what she's already earned as previously agreed.  I have no idea how well she could prove the original agreement.


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