Can a company change commission structure mid-quarter so in essence no one will be paid out?
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Can a company change commission structure mid-quarter so in essence no one will be paid out?
Canadian based company, with at will employees bumped up sales teams commission structure dramatically so, in essence, no one will be paid out. Is this legal?
Asked on May 7, 2012 under Employment Labor Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
A commission structure, in the absence of an employment or commission agreement setting or guarantying it for specific period of time, may be changed at will, but only on a going-forward basis. That is, all work done, and all sales made, up to the point of the announcement of the change must be paid as per the then-in-force structure. From the time of the announcement onward, it may be at the new structure. If the employer refuses to honor the old structure for all work done or sales made pursuant to it, employees may be able to sue the company for breach of contract (even if it was an oral agreement as to what the structure was).
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