Reduction in commission without notification

UPDATED: Sep 30, 2022

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Reduction in commission without notification

I’m in retail sales for a national company. I noticed today that my commission rate was lower than normal on my next scheduled paycheck and called my store HR. Upon investigation, it turns out corporate cut 1 entire department’s commission rate and neglected to tell the store management, so the store could not notify the department. I suggested to the store HR manager that they needed to correct this mistake and pay us the old rate since we haven’t been notified. She said it wasn’t going to happen. Is this legal?

Asked on March 1, 2016 under Employment Labor Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

She (HR) is legally wrong: they need to pay you at the old rate. While it is the case that an employer may change (e.g. reduce) rates without prior notice (unless, that is, there is a written employment contract to the contrary), that is only on a prospective or forward-looking basis: such a change may not require prior notice, but is only effective from when it is announced forward. Work already done must be paid at the rate the employees had, either explicitly or implicitly (i.e. by doing the work), agreed to work for; for work already completed (including sales already made), the employees must be paid at the then-in-force rate, since that's the rate they did the work in expection of. So the employer can reduce future commissions, but the change is not retroactive. If necessary, you could take legal action to enforce the old rate (though obviously, there are negatives to taking legal action against your employer.)

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