Can an employer move to a
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Can an employer move to a
My husband’s company was originally doing a paid when completed commission structure for jobs he sold. It was easier for him to track and dispute any commission discrepancies. They have since moved to a pay when paid structure. Is that legal? Since there is no real way for him to ever know if a customer truly paid an invoice. He has no access to the accounting function in his system. And even to that end, what is stopping them from simply never entering the customer payment, or entering the payment to another customer in error? There is a complete loss of visibility on what is actually due commission wise. He receives a report the day before his commission is paid and has that day to
dispute but he doesn’t know what customers have paid their bills, so the report is useless. He has already found them shorting commission on 1 job where he physically picked up the check and they did not show it as paid. I know that his original agreement has never been amended and signed by both parties, so technically commission is earned once completed. They released an email
regarding the change but never had both parties re-sign a commission agreement.
Asked on May 8, 2018 under Employment Labor Law, Texas
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
IF the agreement you mention was a written agreement for a defined period of time--such as a one-year, three-year, five-year, etc.--and has not yet expired or been properly terminated in accordance with its terms (e.g if there was some early termination clause), then they cannot change his commission. As long as there is a contract guarantying him a certain structure, they must honor that agremeent and he could sue for "breach of contract" if necessary to enforce it.
But the agreement must have been for a set period of time and still be in effect: an "open-ended" agreement can be changed at will, on notice, by the employer, because it does bind them for a defined period of time. The change is effective from when they announce it forward: any work done, sales made, etc. pre-announcement would still be paid under the old structure.
A paid when company paid structure is perfectly legal and is not uncommon: for example, I used to have a small publishing company and I paid my sales reps that way, since it prevented me from having to chase reps to get commissons back on bad debts (deadbeat customers) and also insured I had the money to pay the commissions. So without a contract locking in the old structure, they could do this.
If you believe they owe you money--expenses or commissions--that have not been paid, you could sue for that money (if you are changing jobs, a good time is *after* you have the new job). In the lawsuit, there are ways (called "discovery") to get information from the company and confirm what is owed.
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