Unemployment Q - All Comission Texas

[TXallcommission]

I work as an all commission loan officer for a Texas company. Unfortunately, the economy is such that I can not find another job, but I am all commission and my income has declined to a level that can not sustain my family. Can I quit and collect unemployment due to the fact that I must care for a minor child or that there was a material change in my employment agreement? Here are the details:

• 2006 Signed employment contract with a reasonable commission split.
  Late 2008 given an opportunity to take house leads for a lower split. The increase in overall revenue made sense, so I did it. There was no new contract.
  Early 2009 was a good time, and the company did what it said it would.
  Mid 2009 a new CEO was named, and intially there was little change.
  Late 2009 it becomes apparent that the CEO is diverting house leads to an hourly worker. In general the company is not living up to its end of the bargain.
  January 2010 I request to return to my original commission split, but the request was ignored. I have written evidence.
  February 2010 My son is born, and my wife gets 8 weeks maternity leave.

The best option appears to be demanding my original split back orally and in writting. If they don't give it to me, can I file for unemployment based on a material change in my employment agreement? In addition, I don't expect to make more than the cost of daycare. My wife is currently the breadwinner. Can I file an unemployment claim to take care of a minor child that is not sick?

[hr for me]

Possibly...how much has your commission decreased % wise?

But you also have to look at it from the TWC's viewpoint....any job with any pay is better than no job with no pay, so I am not sure their standard 20% decrease is still applying these days with so many claiming unemployment.

And to get unemployment, you have to state/agree that you are currently looking for a job. It doesn't sound like you plan to do so. Even if your child were sick, quitting your job to take care of him/her would NOT be a reason that would get you unemployment benefits.

[DAW]

Not exactly your question, but it is not legal to pay an employee "all commission" unless you legally qualify as Outside Sales. If you are instead Inside Sales, then you must be paid at least minimum wage.
http://www.dol.gov/whd/regs/complian...tsidesales.htm
http://www.dol.gov/compliance/topics...ommissions.htm

[TXallcommission]

I've seen about a 40% decrease in pay. Would that be acceptable?

[hr for me]

One other thought about that "employment contract". Did, by any chance, the employer actually hire you as an independent contractor -- that's how alot of mortgage firms get around the FLSA and use 100% commission?

I know that is very very common in the mortgage industry here in Texas. My ex-Brother-in-law owns a mortgage company and pretty much all of his workers were ICs. I didn't totally agree with the decision, but it is possible that you were classified as one. If so, the "employer" didn't pay into unemployment for you and you would not have reportable wages.

The easiest way to know is by whether or not the employer paid Social Security and Medicare for you. Was it subtracted out of your pay? If not, there is a real good chance that you wouldn't be eligible for unemployment at all.

As to the 40%, only the TWC can answer that.

[Pattymd]

One other thought about that "employment contract". Did, by any chance, the employer actually hire you as an independent contractor -- that's how alot of mortgage firms get around the FLSA and use 100% commission?

I know that is very very common in the mortgage industry here in Texas. My ex-Brother-in-law owns a mortgage company and pretty much all of his workers were ICs. I didn't totally agree with the decision, but it is possible that you were classified as one. If so, the "employer" didn't pay into unemployment for you and you would not have reportable wages.

The easiest way to know is by whether or not the employer paid Social Security and Medicare for you. Was it subtracted out of your pay? If not, there is a real good chance that you wouldn't be eligible for unemployment at all.

As to the 40%, only the TWC can answer that.

Probably illegal, actually. The DOL has issued a number of opinion letters on this exact issue.

[hr for me]

Probably illegal, actually. The DOL has issued a number of opinion letters on this exact issue.

When I looked into it at the time, I totally agree that IC isn't the correct way to classify these individuals, so the OP might have a case based on misclassification, but that would probably have to be cleared up prior to receiving unemployment since no wages would have been reported. But I suspect that is how the employer currently has it setup....right or wrong.

If the OP is currently being classified by the employer as an IC, I would open that issue with the TWC first before terminating/quitting and hoping for unemployment.

[Pattymd]

When I looked into it at the time, I totally agree that IC isn't the correct way to classify these individuals, so the OP might have a case based on misclassification, but that would probably have to be cleared up prior to receiving unemployment since no wages would have been reported. But I suspect that is how the employer currently has it setup....right or wrong.

If the OP is currently being classified by the employer as an IC, I would open that issue with the TWC first before terminating/quitting and hoping for unemployment.

Agree 100%.