Legal Question in Employment Law in Washington

There is some bad news for the sales staff and bad news for the employer.

The bad news for the sales staff is that, absent a written agreement to the contrary, the employer can change compensation at any time, so long as compensation going forward does not fall below minimum wage. It is not necessary for the employee to sign anything (unless there is a written contract that states otherwise.) Also, if total compensation is cut by 25% or more, the employee can resign and qualify for unemployment compensation.

The bad news for the employer is that compensation cannot be adjusted retroactively. If the employer is just now announcing the revised compensation, the employer cannot go back and retroactively lower commissions. (There may be a possible argument against this if there is a contract expressly stating that sales commissions are adjusted from year to year and may be retroactively corrected, but I question even that and would want to research it before firmly stating one way or another.)

As for the question of signing the revised plan, the answer to the question depends on what the employee is signing. If the employee is signing an agreement to retroactively apply the lower rate, refusing to sign is not grounds for termination, as he or she is being asked to waive his or her legal rights. If the employee is being asked to sign an agreement to apply the lower rates going forward, I am of the opinion that the employee can be terminated for refusing to agree. The reasoning would be that the employer is saying, "This is what I can pay you going forward. Will you work for it or not?" If the answer is "no", then the employee cannot continue to work there. However, an employee who is terminated for declining to take a pay cut would certainly qualify for unemployment.