Can an employer change your commissionable gross without notice with something not stated in your signed pay plan?

UPDATED: Sep 30, 2022

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Can an employer change your commissionable gross without notice with something not stated in your signed pay plan?

Are employers allowed to add a dollar
amount to your commissionable gross
without your knowledge?

Ex The company has a product that cost
10,000 and you sale it for 12,000.
Your commissionable gross should be
2,000. But they add what is called a
‘PACK’. This pack can go to owner or
pack to company. So if the ‘PACK’ is
1,300 dollars your commissionable
gross is now 700. Now this ‘PACK’ is
not mentioned in any pay plan nor do
they notify you of change in the
amount. This ‘PACK’ never goes down
only up. In the past 3 years it has
gone 500 to 1300. Now at 20
commission the amount of money being
cut from my pay is drastic. This doesnt
seem legal because they are so
secretive of it with the managers and
sales staff about it. What is stopping
them from saying it’s 2,000 which the
average sales gross per product is only
about 1,000 already. There is a
minimum commission amount of 125. But
this ‘PACK’ really makes it impossible
to make any money and completely stacks
the deck against sales staff. If it
helps this what an auto dealership is

Asked on January 26, 2017 under Employment Labor Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

They can do it at will on notice, *going forward*, unless you have a written commission or employment agreement locking in how commissions are calculated. Otherwise, without such a written agreement, they can change commission structure, calculation, etc. at will, but again, only from when they tell you. So if on Monday at 9am, they announce a change in how you are commissioned, they is effective for all sales made from Monday 9am on. But they cannot retroactively change commissions: so if you sold a car when the then-in-place structure or method of calculating would give you a commission of, say, $500, they can't after the fact say that no, your commission is really only $350; doing that is a violation of the oral (unwritten) agreement under which you sold the car in expectation of a $500 commission. (Oral agreements are enforceable; the problem with them is because there is no written term or length to them, they are changeable at will by your employer, as long as they tell you of the change.) So they can make changes in the structure, rate, etc. as long as they tell you about them, from when you are given notice forward. If they make a retroactive change, you may be able to sue them for "breach of contract" for the money you should have received but did not.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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