Legal Question in Employment Law in New Jersey
Commission-Based Pay for Outside Sales
Can an employer who has an outside sales team consisting of workers who are not paid a base salary, who are only paid commission based on their individual sales, reduce the percentage of that commission or change the rules determining the amount of commission due, at any time if the sales people do not have written contracts?
Also, is it legal for such an employer to place a financial penalty upon outside sales people who make errors when entering invoices, by reducing the amount of commission they have already earned?
2 Answers from Attorneys
Re: Commission-Based Pay for Outside Sales
Generally, an employer cannot deny you your earned wages. If you have an employment agreement that can be proven through documents of some kind, you may have a wage payment matter. Feel free to call our offices or e-mail me directly to discuss.
Re: Commission-Based Pay for Outside Sales
Yes and no - probably.
Absent a contract, statute, or government regulation to the contrary, an employer can change the circumstances of employment applicable to future earnings. So, the easy answer is that the employer can change the commission basis if it applies prospectively but not for sales already made. It is a closer question if there is an active prospect and even closer still if there is a question of commissions for continuing business from a current customer.
As to your second question, employers can generally not charge employees for mistakes unless there is some written policy to the contrary. If there is such a policy, its application to setoff existing earnings is questionable and would depend on the specific facts and probably the leanings of the judge.
See also: http://info.corbettlaw.net/lawguru.htm
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