Question on changing commission structure

[RJKA]

Jurisdiction

Illinois

Hello!

Thanks in advance for any advice. We are a start up company that just finished one year of being open for business in the state of IL. We have an employee that we hired with a base pay + a 2% commission (This is the word used in the offer letter) on orders. By accident we have been paying this employee 3% on all orders, because the employee has done a good job we let this go. Now we have reviewed our numbers after 1 year of being open and realized that outsourced jobs are at very little profit margin and we have lost money on these jobs after commission payouts. We have revised the commission structure for ALL employees where commissions are only on in-house jobs.

This employee in question refuses to sign an updated employment letter/employee handbook, stating "Illinois wage payment laws do not allow employers to unilaterally change compensation for their employees without their employee's agreement". The employee is also asking for a large % in base pay increase.

#1 - Are we allowed to change commission structures? This change would be effective as of 11/3 and we would still adhere to the prior structure for sales completed prior to this date.

#2 - Since we overpaid on commissions, do we have any leverage to state that we would need to take back overpaid commissions?

Thank you!

 

[army judge]

#1 - Are we allowed to change commission structures? This change would be effective as of 11/3 and we would still adhere to the prior structure for sales completed prior to this date.

#2 - Since we overpaid on commissions, do we have any leverage to state that we would need to take back overpaid commissions?

You are running a business, as in a commercial, for profit enterprise.

You should be speaking to your corporate counsel or your CPA.

It is neither wise or prudent to discuss corporate or financial business with STRANGERS over the internet, unless you want your coffers hacked, or your business compromised, as well as your employee'e and vendor's data.

 

[adjusterjack]

This employee in question refuses to sign an updated employment letter/employee handbook,

So, fire him. The last thing you need is an employee to walk all over you.

stating "Illinois wage payment laws do not allow employers to unilaterally change compensation for their employees without their employee's agreement".

Ask him: "What statute number would that be? I want to look it up."

The employee is also asking for a large % in base pay increase.

You've heard of the word "no"? It's a common word. You hear it every day. Use it.

Are we allowed to change commission structures? This change would be effective as of 11/3 and we would still adhere to the prior structure for sales completed prior to this date.

Yes, as long as you give your employees advance notice. You do not need their permission (unless Illinois has some really strange laws which I don't have time to look up).

Since we overpaid on commissions, do we have any leverage to state that we would need to take back overpaid commissions?

No. You let it go because he was doing good work.

 

[RJKA]

Thank you....this employee also states their sibling is a labor attorney and we want to be fair to our employees but keep our business running as well....

 

[Zigner]

Thank you....this employee also states their sibling is a labor attorney and we want to be fair to our employees but keep our business running as well....

You will never succeed if you allow yourself to be bullied.

 

[RJKA]

You will never succeed if you allow yourself to be bullied.

I agree and have told this to my spouse....who has had no problem "cleaning house" when needed. But we have had such a hard time finding decent employees too....so it puts us in a tough spot. But I really appreciate all the advice!

 

[justblue]

I agree and have told this to my spouse....who has had no problem "cleaning house" when needed. But we have had such a hard time finding decent employees too....so it puts us in a tough spot. But I really appreciate all the advice!

Hate to break it to you...but an employee that implies he will sic his "labor law attorney brother" on you is NOT a "decent employee".

 

[cbg]

Either he can show you a labor law that says what he claims or he can't. Telling you he has a sibling who is a labor law attorney is not the same as providing you with a statute number that proves his point. Tell him to get you a statute number that will prohibits you from changing your pay structure or his sibling attorney can see you in court.,

ETA: Oh, and if he does provide a number, be sure to tell him you'll have it reviewed by your corporate counsel. Don't allow him to interpret it for you.