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Pay for Performance Debate in Michigan

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  • Pay for Performance Debate in Michigan

    Hello all,

    I would greatly appreciate any help that you can offer on my problem as I am extremely frustrated. I am a full-time, salaried (exempt) employee in Michigan who works in sales. I was put on a pay-for-performance compensation plan approximately two years ago and although I received the plan in writing when it was implemented, I was never allowed to sign a contract (despite several requests made by me). I went above and beyond my target last year and received a sizable incentive payout for my efforts.

    About a month ago, I closed all of my accounts for this year and asked for my incentive payout information. Once again I surpassed my target amount and while I was waiting for the Payroll department to tell me how much I would receive, they sent me a letter telling me that they had changed the pay-for-performance plan back in January 2009, putting into place a much higher target as well as lowering the percentage payout amount. They told me that my incentive would be calculated with these new percentages. However, this was a big surprise to me because I was never made aware of the new plan or the changes they had made.

    My sales position is different than most, insomuch as I "close the sale" and have my clients sign a contract but the closing of the group accounts do not happen until 12-18 months later. I feel that it is unfair that they will hold me to this new plan (which means a difference of over $7,000 in my payout) when in fact all of my signed contracts are predated to January 1, 2009. Is this legal and do I have any recourse against it?

    To make matters more pressing, our office is being closed at the end of this month and all employees are being involuntarily terminated. My last day with the company is at the end of this week and I have still not been supplied with my incentive payout amounts or the date in which they will be paid. It makes me very nervous that they have not been willing to finalize it in a timely fashion and I'm worried I will be terminated before I have the information.

    Thanks in advance for your help.
    Last edited by FrustratedinSales; 10-05-2009, 03:08 PM.

  • #2
    Wow, I'm surprised after so many views there hasn't been any suggestions offered... that's a little discouraging. Well, how about this one for you?

    I realized yesterday that despite my salary exempt status, I make slightly less than the required $455 per week. Granted the difference between my wages and the $455 requirement in my most recent paystub is less than $1, but I don't quite make the cut.

    I have a feeling I was taken advantage of when I was told I would be changing from hourly non-exempt to salary exempt. None of it was explained to me and I had no idea what the changes meant. On a daily basis I still performed the exact same job, the only exception being that when I had the opportunity to travel on business trips (which was several times a year), I wouldn't be allowed to collect any overtime or be paid for Saturday and Sunday. I was actually told, for that reason they were switching me to a salaried employee.

    Were they in the wrong for doing this? Thanks again for your help in advance. You guys provide a great service.

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    • #3
      I passed the first time because I was sure that I cannot give a good answer. That is still true, but since you insist.
      - Oversimplification, but there are two different types of law. Labor law (such as the federal FLSA law) and contract law. Words like "exempt" and "salaried", especially used together, are FLSA concepts. Under FLSA, if your salary is paid, your employer has done what the federal government requires them to do. Based on what you have said, under federal labor law, the employer has not actually violated any law.
      - States also have labor laws (usually). A state like FL has next to no labor law. It is generally called a "just like federal" state. A state like CA has a lot of labor law, including laws that cover your types of situation. However, your state is not my state and I have no idea what MI law on this subject is. To my knowledge, none of the regular responders are particularly expert in MI labor law. We have people with 50 state charts who can look up simple stuff, but this is not simple stuff. Maybe MI DOL (or whatever MI calls it's department of labor) is interested in this stuff and maybe the are not. It really is different for each state.
      - Then we have contract law. All contracts are agreements, but not all agreements are legally enforceable contracts. In fact, most agreements are not legally enforceable contracts. The answer to all contract law questions is to take all documentation to a local attorney for review. Since contract law is between parties and not imposed by the government, there is no way anyone on an internet web site would have any idea what the exact wording of your documents are and just how they would fit into MI contract law.

      I am very aware that this is not the answer that you are looking for, which is why I did not answer you the first time.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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      • #4
        Hi DAW,

        Thanks for your reply. You're very right that my situation isn't simple stuff... that's why I've been so frustrated because it seems like I fall into a very, very gray area. I'm sorry if my comment about being discouraged came off the wrong way. I actually meant that it was discouraging because my problem seems to be too complicated for general guidance. I guess my only option is to contact a lawyer if I decide to pursue it.

        Thanks very much and I appreciate your clarification!

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