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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
Satisfied Customers: 12468
Experience:  Significant experience in all areas of employment law.
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I work company involved in sales. They've done a number of

Customer Question

I work for a company involved in sales.
They've done a number of things in recent years that has not pleased me.
For reference, until recently I also had a salary of $3,000 a month for various duties such as legal paperwork/logistics/marketing.
I get paid 30% on all my normal sales opportunities.
About 2-3 years ago the company created a "broker sales" program, in which 5 people are invovled (2 are majority ownera and 1 is minorty owner of the company, with the other 2 being myself and my counterpart).
Before this happened I was getting paid 30% commissions on all sales, after this happened, since most of our business is focused on VARs, any company deemed a "broker" would be changed to this program and each member would be paid out 5% or 25% total (but in reality only 15% because the 2 owners would put their portion back into the company and the other minority owner is paid like me and my counterpart, so 3 of the 5% commission were paid out.
Lastly, I am very flexible and not in the office all the time due to various reasons including travel for business/meeting clients/working from home.
Just last week, my employer had mandated for me, a clock in card at the office so that I now must require 40 hours in the office each week to reach the $3k a month salary total.
I'm obviously upset about this for many reasons - but I want to figure out my legal standing or my employer's in this matter. What do I need to know, what are they doing correctly and what are they doing wrong?
Did they have the right to reappropriate my client base from 30% commissions to 5%?
Can they expect me to stop working on my sales tasks (most of my money I make comes from my commissions) so that I have to drop everything to work on legal responses/etc while only being paid a meager hourly wage?
Please let me know!
Submitted: 1 year ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 1 year ago.

Hello and thank you for entrusting me to assist you. My name is ***** ***** I will do everything I can to answer your questions.

First, can you please tell me whether you had a contract which guaranteed your original compensation structure for a set period of time? Second, can you please tell me if you spend most of your time away from your employer's office "making sales" on your own, or do you report to your employer's office most days?

I very much look forward to helping you on this matter.

Customer: replied 1 year ago.
I do report daily, but there are times like last week where I was in vegas for work for 3 and a half days - this was also for a Broker event so all sales garnered from this event would only pay me 5% commissions vs the standard 30%, on top of that, I was also there to promote a partnership we have with another company and to promote overall brand awareness - not something that can be easily translated into dollars and cents - while the time away from the office and not able to "clock in" would cost me money in a more black/white sense.But to answer your question yes - I do "normally" come to the office daily - but as a sales rep I am encouraged to travel more and see clients - but with these new restrictions I feel like I its very counterintuitive.My current mood is to just "give up" my salary, but I feel like I've been forced to make this decision. Meanwhile, I don't think I have any type of contract on file, so not sure if that protects me or them.Also - I was the 6th employee on and good friends with the owners of the company, in 6 years we have grew to over 40 employees and now own 2 buildings, have had about 40% growth over the last 2 years as well as just topped the $3m revenue monthly mark for the first tiem last month, October 2015. So the company is in no means struggling.
Expert:  Patrick, Esq. replied 1 year ago.

Thank you very much.

I think the best way to address your questions is by explaining what your employer can do, rather than what they cannot.

Generally speaking, employers have very vast discretion over how they choose to run their business, including how they pay their employees. The terms of employment can be changed at any time absent an express agreement to the contrary, as employment is "at will" absent such an agreement. It doesn't matter whether the new terms are fair, or how well the company is doing.

Really an employer's only limitations when it comes to pay are that they must pay minimum wage (presently $9/hr in CA) and overtime when required. A "commission only" compensation structure is permissible, provided that the employee's net pay each pay period is equal or greater than minimum wage for the number of hours they have worked. For example, in a standard 80 hour biweekly pay period, an employee at minimum wage would be entitled to at least $740. If the employee's commissions during that pay period exceed $740, then the employer has met its minimum wage obligation. If the employee's commissions are less than this amount, then the employer must make up the difference. The employer must also pay overtime for hours worked in excess of 8 per day or 40 per week.

While you are rightfully upset by the fact that your employer is not requiring you to spend time on "non-commissionable" activities, that is actually not illegal. Your employer can require you to engage in any sort of activity that they deem is necessary for their business. Again, the only requirement is that your paycheck at the end of the pay period equals or exceeds minimum wage. The fact they are decreasing your profit potential is not illegal, it is just reason to leave the job in favor of somewhere that you can make more money.

If you believe that your employer has failed to pay you at least minimum wage in a pay period (it wouldn't matter if you got more than minimum wage the next pay period--your employer can't "average" pay periods to satisfy the minimum wage requirement, it is judged separately each pay period), or if you have been denied overtime, your best recourse would be to file a wage claim with the Department of Labor Standards Enforcement. This is a free administrative claims process that does not require an attorney. Furthermore, a wage claim is a form of legally protected activity. This means your employer will be legally prohibited from retaliating against you, and any adverse employment action which you can link to the filing of your complaint with give rise to an entirely separate legal claim for damages.

Ultimately, though, your best recourse here may be to leave for a job where there is better earnings potential and you are treated m ore fairly, as while you do have certain minimal rights, those rights do not require your employer to be fair or to earn what you deserve for the work you are performing.

I hope that you find this information helpful. 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, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes moving forward.

Expert:  Patrick, Esq. replied 1 year ago.

Hello again,

I just wanted to followup with you to make sure that you did not have any further questions or concerns. For some unknown reason, the experts are not always getting replies or ratings (which is how we get credit for our work) that the customer thinks have gone through. In your case I have not yet received either. If you are having technical difficulties with reading, replying or rating, please let me know so that I can inform the site administrator.

In any event, it was a pleasure assisting you and I would be glad to attempt to assist you further on this issue, or a new legal issue, if needed.

Very best wishes.