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Base pay taken away now commission only California

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  • Base pay taken away now commission only California

    My fiancee' works for a freight forwarding co. doing Outside Sales, or what we believe to be outside sales. He has been with the company for a year and a half. When he first started, he was making a base pay plus commissions on total company sales, whether they were his or not. Meaning, as long as the co. billed over a certain amount of sales, he would get a percentage of that, he was also supposed to make an additional commission on his new clientel IF their revenue exceeded a certain ridculous amount.(which has yet to happen) A few months ago, he was told he would only be getting commissions on his new clients and that his base pay ($600/wk) which was called a "DRAW" was for servicing the existing clients, and at this time was made to sign a form stating that he acknowledged this. Just today, the Owner informed him that starting February, he would be no longer receive a base pay....commission only. He will be getting commissions on his new clients and commissions for orders placed by existing clients.So basically, he is expected to work 5 days a week 6-8 hours/day, hoping to get a 7% commission on customers that may not even be using the co. We all know this doesn't sound right, but is it legal?

  • #2
    Maybe legal. Maybe not. I am including a pointer to the federal factsheet on the Outside Sales exception.

    IF the employee does indeed correctly qualify for the Outside Sales exception, THEN what is described is legal under labor law. Not all law is labor law. If you think that there is an enforceable contract to the contrary it would be worthwhile to have a local attorney review the documents. But in general the legal intent of the Outside Sales exception is to allow (but not require) the employee to be paid on a 100% commission basis irregardless of hours worked and without any minimum pay requirement. Outside Sales is the only type of employee under the federal FLSA law for which this is true, which not coincidentally tends to encourage employers to mis-classify employees.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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