Commissions earned prior to resigning to be paid at a lower commission if commission structure changed after resignation date?
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Commissions earned prior to resigning to be paid at a lower commission if commission structure changed after resignation date?
I resigned my job 09/06th; my commission cycle was from 08/21 – 09/20. Commission earned up until 09/05 was $2,900 and it was agreed that all futures were to be forfeit as of the day of my resignation. At some point after my departure (between 09/07th – 09/20), the commission structure was changed for the ongoing cycle and it changed and the commission of $2,900 down to $1,080. Is the employer able to get away with this or must they pay at the rate from when I resigned?
Asked on October 21, 2016 under Employment Labor Law, Oregon
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Commissions are earned based on the structure or rate in effect *at the time* they were earned, unless and only off there was *at that time* an agreement in place that commissions would be paid at the rate in effect at time of payment, even if different from the rate when earned. In the absence of such an agreement or notice that commission rates could change in the future, you performed work (earned the commissions) in exchange for a certain agreed-upon compensation (the then-in-effect rate); if you are not paid at that then-in-effect rate, that is a violation of the agreement pursuant to which you did the work, and you could sue for breach of contract for the money.
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