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Pay structure change

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  • Pay structure change

    I am technically classified as a contract employee for now. I work full time and the state is forcing the company I work for to classify us as regular employees.
    I work for commission and am paid for the previous weeks sales on the following Tuesday. This is how it's been since I started.
    Yesterday I was told because the company has lost money in the accounting aspect of it of which I have nothing to do with. I will now be getting paid when the sales are paid.
    Roughly 80% of sales are done through invoicing and can be as late as 60 days out.
    My question is:
    Are they legally allowed to do this? To just change how an "employee" is paid?

    I would eventually make the same amount of money I am now. So it's not a permanent pay cut. But I know I cannot wait roughly 2 months for the transition period to fully take affect.

    I would think I would be more concerned about where the money went and fix that problem before making so many changes. But that's just an opinion and not part of the question I guess.

  • #2
    There legally is no such thing as a "contract employee". Legally there are employees and independant contractors.

    Independant contractors do not have taxes withheld from payments, have "customers" and not employers, receive a 1099 at year end and are covered by contract law, not labor law. Solutions basically involve a hard read of the contract language and court actions.

    Employees have taxes withheld from payments, have employers making the payments, receive a W2 at year end and are covered by labor law. Solutions could involve court actions but more traditionally involve federal and state DOL wage claims.

    Assuming that you are an employee, then it is not illegal on it's face to have a commission payment that does not become "due wages" until the payment is actually received from the customer. Arguably any employer who does not write commission policies in this manner is not very bright. However commissions are very specific to the laws of the state involved plus the exact wording of the company's commission agreement. Also, unless you are legally an outside sales employees, it is not legally to base your pay solely on commissions.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


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