If you work as a sales representative, you may receive part (or all) of your pay on a commission basis. Employers and employees alike often favor commission plans. The employer likes this plan because it is only locked into paying a low amount each month for the employee’s hourly rate. The employee likes this plan because he has the potential to earn big figures if he applies himself and works hard.
But, sometimes, problems develop for employees who receive commission payments. Unlike hourly pay, commission payments feel more flexible to an employer. This may lead the employer to take liberties the employer wouldn’t try with an employee who is paid on a straight hourly rate system. Sometimes, an employer doesn’t pay commission payments for commissions the employee actually earned.
Why do employers try to avoid paying employees proper commission payments?
Employers avoid paying employees commissions for various reasons. These reasons include:
- The employer has cash flow problems. If the employer doesn’t have much money in the bank, it may prefer to allocate its limited funds to another debt, rather than to paying an employee.
- The employer is trying to save some money—by shortchanging the employee. The employer may take a gamble that giving the employee a “haircut” on his pay won’t make the employee mad enough to quit.
- The employer is throwing its power around. The employer knows it has the upper hand and wields its power, just because.
- The employer knows the employee earned a big commission and the employer—greedily—wants to keep the money for itself. While it makes no sense that a company would hurt its top producers, that’s just what some companies do.
- The employer has a legitimate disagreement about who earned the commission or how much is actually owed. Sometimes a commission dispute is just that: a legitimate dispute over who earned the money and how much was earned.
- The employer wants to fire the employee but doesn’t know how. The employer decides to make the employee’s life as miserable as possible so that the employee will quit on his own. Avoiding payment obligations is a good way to make an employee mad enough to quit!
If you think you’re owed money, call us.
If you think you’re owed money because of your work as a sales representative, contact the Washington overtime attorneys at Kennedy Hodges by calling 888.449.2068 or by filling out our online form.