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Questions about Pay for Performance Compensation

Pay for performance offers employees a chance to enhance their pay by the work they perform. Usually, the employer and employee agree upon a base pay with quarterly or annual evaluations of the employee’s job performance. There are times when questions arise about performance based pay. Maybe someone has an issue with certain policies with their employer’s evaluations or maybe they just want to know more about pay for performance incentives. The Employment Lawyers on JustAnswer answer many pay for performance questions and offer experienced legal insight to any question that you may have. Below is five of the top pay for performance questions answered by the experts.

Is an employer legally obligated to honor yearly performance raises if it is agreed upon in a letter of employment?

This could depend upon how the letter of employment is written. If it is actually stated in the letter that the employer promises specific benefits or practices, this could create a contract that the employee may be able to enforce, perhaps through a court action. The wording in the letter could be critical. The phrase “performance based” suggests that it is for an employer to decide which performance merits a raise or bonus. The employee would need to show that other employees who performed similar tasks with similar results were awarded with a performance raise or incentive. Without the proof of similar raises to other employees, it could be difficult to enforce such a provision.

Is it legal for a company to deny vacation pay and then fire a performance base pay employee who has turned in his resignation?

From a legal perspective, if the company has a policy of not allowing more than two weeks consecutive vacation, and they now choose to make an exception for your terminal leave, there is little you could do about it. If you don’t have a written employee agreement that guarantees you can have your vacation pay upon resignation, you are considered an employee at will. At-will employees can be fired at any time for any reason. They can also have their hours cut back or receive a pay cut, which could affect their benefits, as long as this isn’t done in an illegal or unlawfully discriminatory manner.

Can an employer withhold an employee’s check until the employee signs a wage modification agreement?

An employer cannot usually withhold wages from an employee in order to force that employee to agree to a different contract. The employer would not be complying with the Fair Labor Standards Act (FLSA). An employee must receive their wages on the payday that the wages are due. The employee doesn’t have to accept any modifications which are made by the employer unless the employee is voluntarily agreeable to the changes without any pressure or duress.

Can a person file for unemployment benefits if they were terminated for performance related issues after receiving two performance based pay increases?

Usually, you would be able to receive unemployment after being terminated as long as you weren’t fired for misconduct. Misconduct could be anything from being late for work to violation of employment rules. The employer would have to prove that you willfully disregarded their interests. Unemployment cases are evaluated on a case to case basis, so it could be difficult to predict whether or not you would receive unemployment benefits.

Can certain employees be paid by performance base pay (straight commission) while other employees are paid an hourly rate plus commission?

An employer can determine the terms and conditions for their employees, including duties, hours, and pay. As long as the employer isn’t violating any anti-discrimination laws, company policies or employee contracts, they are within their rights to set the pay rate however they see fit. However, the employer would have to make sure that the employees who are being paid straight commission make at least minimum wage.

If you find yourself in a situation at work that requires a legal perspective, you can take your questions to Employment Lawyers on JustAnswer. The Experts handle a variety of questions related to performance based pay and are ready to answer your questions in an efficient and knowledgeable manner.
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