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I am currently earning $3500 per month in compensation but…

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I am currently earning $3500...
I am currently earning $3500 per month in compensation but received this email this morning. If my company significantly reduces my compensation or puts me on 100% commission which would significantly reduce my compensation, how can I quit or leave and still collect unemployment in Arizona?

Good morning. I am reviewing the 90 day sales analyzer and see you are at $7,060 for July. In order to continue the draw and monthly guarantee as it is, you need to find a way to get 15k on the books by 7/15. I can only extend your current guarantee for another 60 days, then it will start phasing into 100% commission.

It’s only 8k and I know you can do it. Let’s not discuss the options if it doesn’t happen.
Submitted: 8 years ago.Category: Employment Law
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6/21/2010
Employment Lawyer: Marsha411JD, Lawyer replied 8 years ago
Marsha411JD
Marsha411JD, Lawyer
Category: Employment Law
Satisfied Customers: 20,984
Experience: Licensed Attorney with 29 yrs. exp in Employment Law
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Hello,

I am assuming that you do not work pursuant to a written contract. As you may already know, unless you have contract that locks your compensation in for a certain period of time your employer is free to change the terms and conditions of your employment including your compensation basis. Of course, they must give you notice prior to doing so.

If the terms and conditions of your employment are changed significantly from those that existed when you were first hired, there is some chance that if you quit, the State would find that it was for "good cause." That is the determination that they would have to make in order for you to be eligible. All cases though are decided on a case by case basis after considering all the facts and circumstances including the amount of decrease in wages, your job, your industry, and your personal financial situation. Normally good cause is found if there is event that is attributable to the employer that is so extreme or pervasive that it would cause another employee in your same shoes to quit their job. This is basically a reasonable person standard.

At this point since there has been no decrease in your wages, you could not quit and expect to have the State find that you did so for good cause.
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Customer reply replied 8 years ago
Three follow up questions:

If they lowered my compensation to $2,000 from $3500 would that constitute "an event attributable to the employer that is extreme" For example at the 15% commission rate they agreed to pay me, at $15000 per month in collection of monies from advertisers, I would only be paid a gross amount of $2250. This would be an amount that would require an incredible work effort on my part month in and month out to attain that level. Then, I still would have medical/dental and associated taxes taken from this gross pay which would leave me with a very small net paycheck.

The second question is IF I did quit after my compensation was reduced, would I just file for unemployment as usual and wait for this employer to deny my claim?

The third question is that I will be 61 years of age in October and does that play any part in all of this?

Employment Lawyer: Marsha411JD, Lawyer replied 8 years ago
Hello again,

All I can say about your first question is that it would probably be considered a good cause reason if you quit your job with that much of a decrease in income. Again though the State doesn't make decisions in a vacuum so they would look to see how much control you had over your level of income and how others in your profession, industry and locale get paid.

In response to your second question, yes you would just quit and wait for your employer to dispute/object after which you would probably be initially denied and then after you appealed have an appeal hearing with an Administrative Law Judge.

Finally, if you believe that this change in compensation basis is not based on a legitimate business reason but instead is either motivated by age discrimination or has an adverse effect only on certain salespeople over 40 (usually the higher earnings,) then you can file a complaint with the EEOC or the Arizona Civil Rights Division, or file suit under either the Federal ADEA or Arizona law.
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Customer reply replied 8 years ago
If I waited until they lowered my pay to that level and found that unacceptable and let's say that was in September... and I gave them three months notice or to say to them, I will not work for this amount of money so I will work until the end of the year and give you time to find someone to take my place... but then THEY turnaround and ask me to leave or leave within two weeks, does that mean they have "terminated me" in the eyes of the state unemployment? Should I give that notice verbally or written? My guess is they would ask me to leave on a shorter notice than three months.

Also you mentioned they had to notify me of my lowered compensation in writing. Suppose they do that just by email? Or do they have to give me something more formal in writing and what if they want me to sign it? Should I not sign it? I don't want to accept something I am not happy with.
Employment Lawyer: Marsha411JD, Lawyer replied 8 years ago
No, once you notify an employer that you are quitting, then they no longer have to retain you and you are still considered to have quit.

Any time you give notice you should put it in writing. That way both parties have a record of it.

They can notify you of your change in pay via email and you do not have to sign for it. If there was a debate about whether or not you received notice they would just have to show that you received the email just like you do all of your emails before and since. That way they can establish that you got it, whether you signed for it or not.
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Customer reply replied 8 years ago
I think this should answer all my questions... If they present me with the new compensation plan in writing and ask me to sign that I agree to it and I refuse to do so, then does that constitute that I have quit my job. If I were to sign it, then quit later on, wouldn't they just use that signed document to show unemployment that I agreed to it?

How can I position myself so I don't sign a document that I don't agree with?

I just want to be able to get unemployment.
Employment Lawyer: Marsha411JD, Lawyer replied 8 years ago
You don't have to sign anything that you do not want to and your employer probably won't even ask you to. But if they do, it is usually just to acknowledge that you received it, not that you "agree" with it. If you say you won't accept the reduction, then you probably will be terminated or they will just do it and wait for you to quit. In the end, there is no guarantee that you will get unemployment. If they reduce your pay and you can't live with that, then you should move on and apply and hope that the State sees things your way. In any event, read anything that you are asked to sign completely before you sign it. If it says something that you are uncomfortable with, then you can decide whether or not to sign it.
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