Many people who work in sales are paid commissions. The more these sales representatives sell, the more money they make. But, some employers are greedy. They pull tricks to keep their best sales representatives from receiving large commission payments.
How do commissions work?
When an employee is paid on a commission basis, the employee receives pay for each sale the employee makes. For example, an employee may receive a percentage of each sale. If the employee receives five percent of each sale and the employee sells $2,000 in merchandise, the employee receives $100. In some situations, the employee may receive a flat rate for each specific item sold. So, for example, if an employee receives $100 for each device sold and the employee sells four devices, the employee would receive $400 in commission payments.
What are the benefits to a commission-based pay system?
A commission-based pay system rewards top producers with extra cash. So, if a sales representative is a hard worker, the employee can make a lot of money. Employers like these systems because workers are motivated to work hard and to make large sales.
What tricks do employers use to keep sales representatives from receiving large commissions?
This sounds ridiculous, but some employers actually fire their top sales representatives to avoid paying large commissions. If a sales representative brought in an enormous amount of business, you would think the employer would reward the employee for the employee’s hard work and success. But, the opposite may be true. The employer becomes greedy and wants to keep all the proceeds of the sale. So, the employer fires the employee just before the employee’s commission becomes due. In other cases, the employer simply refuses to pay the commission. The employer may argue that credit for the sale should be attributed to another employee.
What can a sales representative do about this?
If you are a sales representative who was shortchanged on a commission payment, contact the employment lawyers at Kennedy Hodges LLP. You can reach us at 888-449-2068 or by filling out our online contact form. Our offices are in Houston, but we maintain a nationwide practice. We represent employees across the United States, including employees from New York, Illinois, Massachusetts, Maryland, South Carolina, California, and Washington. We will conference with you to discuss your situation.