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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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My husband has worked for a dealership for two years now, it

Customer Question

My husband has worked for a dealership for two years now, it was brand new when he started. He is a pre- owned manager and has taken it from the ground up. It has been a struggle and based on his pay plan he barely made commissions on most months. He has gone through three general managers and has gone through this company's grueling constant training programs . The store has been on a slow incline which is what's to be expected. He now finally had an amazing month and they sold more cars than they ever had and he finally got the commission check he deserves after putting in no less than 55-65 hours a week! They have come to him and presented him with a new pay plan that would cut his pay literally in half! They want him to sign this pay plan or basically walk. Can they do this to him when the company is on the rise ? Are there laws against this? Thank you, XXXXX XXXXX
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.
Hello and thank you for entrusting me to answer your question. I am so sorry to hear that your husband's employer is attempting to cut his pay, especially when his commissions are finally starting to equal what you believe he should really be making. I comletely understand how frustrating this must be for both of you.

Although what you describe is extremely unfair, it is not an illegal business practice unless your husband has a contract which guarantees his particular compensation for a specified period of time (i.e. "Employee shall receive 5% commission for the next 12 months"). Otherwise, rates of pay and commission agreements can be change at any time.

This tremendous freedom stems from the fact that California adheres to the doctrine of "at will" employment, meaning that the employment relationship terminable by either party at any time and for any reason. Since employers would be free to simply fire and then immediately re-hire employees under new terms pursuant to the doctrine of at-will employment, the courts have reasoned that employers are equally free to change the terms of employment at any time, since this would accomplish the same exact thing.

If your husband can demonstrate that the proposed new compensation plan will result in a reduction of his wages in excess of 20%, he may be eligbile to quit and collect unemployment benefits on the ground that he quit with good cause. See here for more information: http://www.edd.ca.gov/UIBDG/Voluntary_Quit_VQ_500.htm#Wages/url Keep in mind, however, that this does not affect the legality of the decision to reduce wages itself, which does not violate any law.

I realize that the law is not entirely in your husband's favor here and I am truly sorry to have to deliver bad news. Nonetheless, I trust that you will appreciate an accurate explanation of the law and realize that it would be unprofessional of me and unfair to you to provide you with anything less.

Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, I would be most grateful if you would remember to provide my service a positive rating, as this is the only way I will receive credit for assisting you.

Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Very best wishes to you.

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