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Employment Today™


"COMMISSION PROMISE CHANGES MID-GAME!----WHAT'S A SALES REP TO DO? "

Dear Kathryn:

When I started working here I was given a letter saying I'd make a commission of 40% on all my sales. I agreed to very little money in my base salary, but felt the commission I would earn was worth it as I knew that I had the ability to sell. The company has done precisely what they preached they wouldn't-replace older sales reps with younger sales reps making even less base salary then me. In addition, they announced that as of January 1st, all of our commissions would be at 27%, a 13% decrease in my commissions.

First, I can't afford the cut in commissions, never mind nervous about being ousted by a younger, cheaper-priced sales rep. Second, my manager memo'd us that all pending commissions would be paid at the new, lower rate. I counted on that income and the higher 40% rate. How could previously billed sales be at a lower rate just because they are going to be paid to me after January 1st? They were earned before January.

My boss told me that's the new policy and he has no choice in the matter. I will be looking for another job; but I counted on those commissions to pay bills.

TARA P., Durham, CT

Dear Tara:

Your situation is tricky and the outcome depends on the verbiage of the commission statement that was given to you upon starting work with your employer.

You mention that an offer letter was provided outlining the commission schedule. If the letter stated that the company "reserved the right to change or alter the commission schedule", you are probably stuck with accepting the lowered rate on past sales. Even though the sales were generated prior to January 1, your employer would have the right to change the commission schedule.

I consulted Attorney Brian Clemow on your situation and he said examine your letter closely. If it doesn't contain that clause or something similar, alert your boss that you expect the past sales to be at the past commission rate. Don't threaten anyone. Simply inform your boss that you're aware of the new, to come, commission rate, however, the company should recognize that you're due your old rate on the previously made sales. Should you have problems in getting the commissions owed, you will need to visit the Wage & Hour Division at the State Dept. of Labor. Clemow supported how the clause works when he told me about a recent case supporting an employer's ability to alter commission schedules.

A major mortgage company announced just before a very large real estate closing that the sales person would be getting a greatly reduced rate in commission. The real estate sales person had signed a similar letter with the "out clause" and was stuck with accepting less then half of what they thought they'd be getting in commissions. I questioned Brian as to what kind of notice one would expect prior to change. Brian said that is an evolving decision that's happening in court as you read this.

Clemow also said-and here's the important part-that, before ruling for the employer, the Labor Dept will look closely at whether the employee put forth the majority of effort on a sale before it was announced their commission would be drastically cut.

Read your next commission agreement thoroughly, and be surprised at nothing. Good luck.

Dear Kathryn:

I have worked like a dog as a staff writer for a major newspaper chain for a year now. I get paid a salary, but realistically for the hours I put in, I'm making about $3.00 an hour.

I work weekends and get called for emergency coverage when another reporter doesn't show for an assignment-could be anytime, day or night. While I can come in a bit late the next day in those instances, I'm working at least 55 hours a week.

I knew "journalist" was a fancy name for slave writer, but I feel us journalists should have similar protection that in-office staff has in regards to overtime.

When I broached this with my boss, I was told I was a "creative talent." How does someone who does my job differ from other professionals that are as talented in their trade like a programmer or computer analyst?

Don't I have the right to demand overtime wages given I don't have a management title nor duties, just a lot of work? Please respond.

I love what I do but do not love doing it for nothing!

PAUL O., Manchester, CT

Dear Paul:

You're among the thousands of employees that have similar gripes, and the line between what constitutes exempt vs. non exempt is a blurry one. The Department of Labor has taken recent steps in an attempt to further define that fuzzy line. Regardless, defining who is considered non-exempt and gets overtime and who is considered exempt and doesn't can be a tough decision.

I consulted both Attorney Henry Zaccardi and the Fair Labor Standards Act that goes into that specifically addresses "creative talent" employees.

To specifically address your case, (Section 541.302), we need to determine if your job requires "invention, imagination, originality or talent." If the writing that you do, does require those abilities, you could be considered exempt. A recent court decision concluded that the duties of a "weekly newspaper reporter" did not require invention, imagination or talent. It was stated that a weekly newspaper reporter's work was considered general assignment and that reporters were "rarely asked to editorialize about or interpret the events they covered." Rather, the focus of the writing was to tell someone what happened.

If you wanted to test your employer about your exempt status, Attorney Henry Zaccardi of Shipman & Goodwin advises you call the State or Federal Department of Labor (you can even make the call anonymously.) That might be the best next step before addressing it with your employer. If the DOL feels you'd be considered non-exempt, then have a friendly sit-down with your boss.

Worst case scenario is your boss doesn't agree with your findings the DOL reported to you. You would then need to put a complaint into the DOL. Should you have the very unfortunate experience of being terminated after having this conversation with your boss, you would have cause for a potential "retaliation claim" against your employer.

Having thoroughly read the latest rulings on what differentiates exempt vs. non-exempt, I still find the specifics of what makes for either status to be vague. If you're an employer reading this however, I suggest getting copy of this latest report as it does make for more potential problems and issues.