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Tina
Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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I own a company and three months ago I changed the sales commission

Customer Question

I own a company and three months ago I changed the sales commission structure. I just fired one of my employees and he is suing me saying I owe him money based on the old commission structure. Is this true?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.
Hello and welcome,

If you provided the employees notice of the commission structure prior to making the change and did not attempt to change it retroactively, then you would normally not owe the employee commissions based on the former structure/policy you had in place unless there was an employment contract with this employee that you breached by changing the structure.

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Customer: replied 5 years ago.
this is the pay agreement:
Based on this can i change it?

DEBT SPECIALIST COMMISSION STRUCTURE

- Debt Specialists will receive a $2,000 per month minimum draw against commission.
- Commission or draw, whichever is more, will be paid weekly. ($500 or more per week.)
- Health & Dental Benefits will be provided after 90 days of employment. (CRT employees are “grandfathered” in.)

DEBT MANAGEMENT COMMISSION

UPFRONT COMMISSION
*Upfront Commission will be paid only on “Captured” Benefits fees. Commission will be paid weekly based on the prior week’s “Captured” transactions.
- 30% of all “Captured” Benefits Package Fees for a Junior Debt Specialist.
- 35% of all “Captured” Benefits Package Fees for a Senior Debt Specialist.

RESIDUAL COMMISSION
*Residual commission will be paid on clients who remain in the Benefits Program and pay their $47.90 or $49.00 monthly fees for up to 8 months. Commission will be paid on the 15th of every month based on the prior month’s paid memberships.
- $5 residual for each client payment will be paid for up to 8 months for a Junior Debt Specialist.
- $10 residual for each client payment will be paid for up to 8 months for a Senior Debt Specialist.

FEE BONUS TIERS
*Fee Bonus tiers will be paid based on “Authorized” Benefits Fees from the 1st through the last day of a calendar month. Fee Bonuses will be paid on the 15th of the following month after #’s are verified.
- $10,000 Fees = $250 Bonus
- $15,000 Fees = $350 Bonus
- $20,000 Fees = $500 Bonus
- $25,000 Fees = $750 Bonus
- $30,000 Fees = $1,000 Bonus
- $35,000 Fees = $1,500 Bonus
- $40,000 Fees = $2,000 Bonus
- $45,000 Fees = $3,000 Bonus
UNIT BONUS TIERS
*Unit Bonus tiers will be paid based on “Authorized” Benefits Fees from the 1st through the last day of a calendar month. Unit Bonuses will be paid on the 15th of the following month after #’s are verified.
- 10 Units = $250 Bonus
- 15 Units = $350 Bonus
- 20 Units = $500 Bonus
- 25 Units = $700 Bonus
- 30 Units = $1,000 Bonus
- 35 Units = $1,500 Bonus
- 40 Units = $2,000 Bonus
- 45 Units = $3,000 Bonus


EMPLOYEE REFERRAL BONUSES
*Employees will be paid 1% of Upfront Commission off any new hire’s volume that was referred by employee.













DEBT SETTLEMENT COMMISSION
RESIDUAL COMMISSION
Junior Debt Specialist - 25% of monthly fee
Example:
$40,000 Debt
X 15%
= $6,000 / 22 mo.
X 0.25% = $68.18 X 3 mo. residual

Senior Debt Specialist - 30% of monthly fee
Example:
$40,000 Debt
X 15%
= $6,000 / 22mo.
X 0.30% = $81.81 X 3 mo. residual

BANKRUPTCY COMMISSION
*Employees will be paid a $100 bonus for all completed, enrolled, and paid Bankruptcy deals.

EMPLOYEE REFERALLS
*Employees will be paid 0.5% in Residual Commission off any new hire’s revenue that was referred by Employee.
- 5% of Rep’s 15% commission / 22 mo. (only paid over rep’s 3 month residual)

Example:

$40,000 Debt

X 15%

= $6,000 / 22 mo.

X 0.5% = $13.63 X 3 mo. residual

COMBINED PRODUCT COMMISSION
CAR BONUS STATUS
*Monthly Car Bonus of $400 per month will be paid once employee achieves a combined score of 10 Points.
Debt Management Debt Settlement
$25,000 Fees = 1 Point $1,000,000 Volume = 1 Point
$50,000 Fees = 2 Points $2,000,000 Volume = 2 Points
$75,000 Fees = 3 Points $3,000,000 Volume = 3 Points
$100,000 Fees = 4 Points $4,000,000 Volume = 4 Points
$125,000 Fees = 5 Points $5,000,000 Volume = 5 Points
$150,000 Fees = 6 Points $6,000,000 Volume = 6 Points
$175,000 Fees = 7 Points $7,000,000 Volume = 7 Points
$200,000 Fees = 8 Points $8,000,000 Volume = 8 Points
$225,000 Fees = 9 Points $9,000,000 Volume = 9 Points
$250,000 Fees = $10 Points $10,000,000 Volume = $10 Points













SENIOR DEBT SPECIALIST STATUS
*Senior Debt Specialist Status will be awarded once employee achieves a combined score of 15 points.
Debt Management Debt Settlement
$25,000 Fees = 1 Point $1,000,000 Volume = 1 Point
$50,000 Fees = 2 Points $2,000,000 Volume = 2 Points
$75,000 Fees = 3 Points $3,000,000 Volume = 3
Expert:  Tina replied 5 years ago.
This structure does not indicate that it will remain in effect indefinitely or for a term of years, so the employer typically retains the right to modify the structure at any time with proper notice to affected employees.

Tina and other California Employment Law Specialists are ready to help you
Customer: replied 5 years ago.
How would you reply back to the attorney who wants to sue me based on change of commissions?
Expert:  Tina replied 5 years ago.
It would be best to retain an attorney to respond since the employee has retained an attorney and could help prevent a complaint being filed with the labor board or a lawsuit being filed against you.

Customer: replied 5 years ago.
How much would it cost for you to do it?
Expert:  Tina replied 5 years ago.
I cannot represent individuals through this forum based on the website's terms of service.

I'm sorry.

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