Incentive Based Pay Related Questions

Earning commissions and incentives for your work is both a rewarding and an immensely satisfying experience. However, rules regarding incentive plans change from organization to organization. If you have queries regarding incentive payments, Employment Lawyers on JustAnswer will clear your doubts and answer your questions as precisely as possible. A few of the top questions on incentive pay answered by Experts are listed below.

Can a company take away an employee’s commission or incentive pay if he calls in sick for a day?

An employee earns commission based on the work that he does. In most cases, this cannot be taken away from him. However, incentive pay is a bonus paid to the employee at the discretion of the employer, so it is possible that this could be cut if he does not turn up for work.

In a company where incentive pay is paid at the end of a quarter, does an employee need to be at work on the day of the payout in order to receive it? Can the payment be delayed if the employee is away on LOA?

In most cases, the employee does not have to be at the office on the day of the payout since the incentive earned is based on the previous quarter’s results. Therefore the payment should be made to the employee as scheduled.

If an employee terminates his employment prior to the incentive pay being paid, can an employer withhold payment?

Incentive pay is usually determined based on how the employee has performed over a set time period. Therefore, under normal circumstances, the employee would be entitled to the bonus on the scheduled payment date if he completed the work during the required, agreed-upon time frame. This holds true if a subsequent termination happens before the scheduled payment date. In cases where the employer refuses to do this, this could lead to a wage violation and the employee could file suit.

In certain states, if the employee’s job is terminated involuntarily, the employee will usually receive all compensation owed to him until the day of termination.

However, every case is different. If you need clarity on the specifics of your case, you can write in and ask an Employment Lawyer on JustAnswer to evaluate your case and give you the exact legal information you need.

Can an employer make changes to incentive payments already decided upon with retroactive effect?

In most cases, employers can make changes to incentive plans that will determine payments in the future. But they cannot change their payment plan retroactively if this money constitutes a part of the employee’s wages. If the employee has already completed the work and was due to be paid a certain amount agreed upon in advance, then, usually, this amount is what the employer would need to pay.

If this payment has not been done and constitutes a part of the employee’s wages, the employee could file a complaint with the Department of Labor - Wage and Hour division. Alternatively, if this payment is considered a bonus, then the employee might have grounds to file a suit for breach of contract against the employer.

Company ABC’s incentive plans are based on sales goals. One of its employees has met the required target, but there is a discrepancy with the report. Despite having submitted documents as evidence of the error, the employee has been told that he will not receive incentive pay. Is this considered legal?

If the employee has earned an incentive bonus based on his performance and is not getting paid due to an error in documentation, he is still entitled to the full payment. One way the matter can be resolved is if the employer agrees to make the payment in the next quarter. However, if a boss decides not to pay the employee at all, the employee could appeal the decision with a higher authority in the company or contact HR. If those efforts don’t succeed, another option might be reporting the incident to the Department of Labor or taking civil action to resolve the issue.

Getting your fair share of remuneration for the work that you have done is important. While incentives make you work harder, they also have legal implications that you need to be aware of. Contact an Employment Lawyer on JustAnswer with questions you may have on incentive pay and get answers in a quick and affordable manner.