Can I restructure how an employee is paid if they currently get commission and salary but I want to make it commission only?

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Can I restructure how an employee is paid if they currently get commission and salary but I want to make it commission only?

I have an employee who is in sales and receives a base salary for a minimum number of closed sales. Commission will be paid after her required minimum. She had not been meeting her minimum quota and constantly complains that ist is because her teritory has been reduced etc..Her territory has sufficient resources to produce her minimum number of sales. I would like to re-structure her pay so that it is a 100% commission based structure so that she can earn more than she is presently earning if she performs. Can I legally do this? If so, how much of a notice do I need to give her?

Asked on July 10, 2015 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

1) Yes, you can pay an employee by commission "only" but have to make sure (such as by non-refundable advances or draws) that she makes at least minimum wage in order to comply with the labor laws.

2) You don't need any notice--it can be effective from when you tell her forward.

3) If she has a written employment agreement or contract, you'd need, however, to comply with whatever it says, which may restrict your ability to do this--you can't violate the contract, so you may need to wait until its current term expires.


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