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Can a company selctively change your commiission pay scale at ramdom. Texas

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  • Can a company selctively change your commiission pay scale at ramdom. Texas

    The company I work for just decided to change our compensation package on all but 4 sales people. I accepted the job a year ago. I have preformed per our agreement and now they are cutting our commission by 25% or more and asking us to sign and agreement that says they can sue us if we leave the company and the client terminates the contract for any reason for un collected commission.

  • #2
    What does your existing commission agreement say?
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


    • #3
      Originally posted by cbg View Post
      What does your existing commission agreement say?
      Description: The Sales Rep is responsible for generating profitable revenue by sourcing new customers and accounts, growing and retaining existing accounts, and providing unmatched customer service. This position requires up to 50% travel

      Salary: $####### with a fast start commission of $##### for the first 6 months. Commissions accrued from sales will not count in the first 6 months until they reach the $######. All paychecks are paid on the 1st and 15th of each month

      Commission: Commissions will be paid out on the 1st of every month. Commission are 8% of recurring revenue. Please see salary section above for commissions to be paid during the first 6 months.

      Vehicle Allowance: The employee will be provided a company vehicle. Toll tags and credit card for fuel will also be provided

      Health/Dental Insurance: Available 90 days from start date (###### pays the first $200/ per month)

      Vacation/Holiday time: Paid Vacation is granted 90 days after start date with a maximum total per year at 80 hours. Sick time is granted 90 days after start date at a rate of 40 hours per year. Sick and Vacation time can be rolled over from year to year. Vacation will cease to accrue once you have reached the max of 80hrs
      Last edited by rebeal58; 01-18-2016, 08:24 AM.


      • #4
        Unless you had some guaranteed length on your original commission plan, the employer can change it going forward. Generally they do need to put the new plan in writing, which it seems they have. And it sounds like they are considering the commission a draw if you leave.....Honestly I don't see anything in what you posted that goes against TX law.

        The TWC does have an Employer Handbook that is pretty good about stating what is legal and what is not:
        "Concerning commissions and bonuses, the employer should always use clear written agreements setting out the conditions of such payments. As noted in the section above on pay agreements, commissions and bonuses can be changed, but only prospectively, never retroactively, and changes to written agreements must be in writing." and

        "A common problem is that of what happens with an employer's duty to pay commissions and bonuses once an employee has left the company. The answer depends upon the terms of the commission or bonus agreement. Commission pay agreements are enforceable whether they are oral or in writing, and agreements can be established with a showing of a pattern or practice of paying commissions in a certain way. Thus, the advice to have a clear, signed written wage agreement applies with particular force to commissions. Changes to written agreements must be in writing. A good agreement will avoid the risks of ambiguity by clearly setting out how commissions are earned, when and under what circumstances they are paid, whether "chargebacks" are made and under what circumstances, and what happens to commissions from sales in progress at the time of work separation. Similarly, a bonus agreement should specify exactly how a bonus is earned, how it is calculated, when it is paid, whether it is discretionary in any way (as to the amount, timing, or ability of the company to cancel the bonus altogether under certain conditions), and what happens to a bonus that is not determined or paid out until after an employee has left the company. If the commission or bonus agreement provides for payment of commissions and bonuses in any way after an employee has separated from employment, the deadline for such a payment would be based upon the wording of the agreement. Prior draws against commissions may be offset against the final pay; under 40 T.A.C. 821.26(d), "[d]raws against commissions or bonuses may be recovered from the current or any subsequent pay period until fully reconciled." The key to protecting the company's interests is to spell out in a clear, written agreement exactly how, when, and under what circumstances commissions and bonuses will be paid, and then follow the written agreement to the letter, because that is how TWC will enforce the agreement in the event of a wage claim concerning such payments."