Wage Act Violation: Retroactive Change in Commission Policy
George worked as a sales representative for a national telecommunications company. He and his team were on a commission plan that paid based on quarterly earnings, and these commission payments were a substantial portion of their compensation.
Two months into a quarter, the company changed the caps and quotas on the commission plan, resulting in an almost six figure decline in his compensation for that quarter, most of it on sales already made when the change was announced. Because the amount was so large, and because of how heavily George and his colleagues relied on commissions as part of their total compensation package, this was a significant financial hit. Wage Act SolutionWe filed a complaint on behalf of George and one of his colleagues, alleging violation of the Wage Act by failure to pay for commissions already earned when the change in policy took effect. After some discovery, the parties went to mediation and were able to resolve the case to George and his colleague's satisfaction.
PostscriptIf you rely on commissions as a significant part of your compensation, you should know that your employer can only change your commission going forward. They cannot change it in a way that takes away commissions you have already earned, because that is a violation of the Wage Act.
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