Whether you’re in sales or your compensation is tied to some other performance metrics, commissions can make up a significant portion of your income – but your employer could already be scheming to keep those dollars for themselves.
Employers can be creative about how they deny fair commission to their workers, but three common tactics usually come into play:
1. Changing the rules retroactively after the job is started
There are all kinds of ways that commissions are calculated, and some are more advantageous to the worker than others. Imagine, however, that you’ve worked hard to close a deal and are expecting to earn a certain percentage for your commission – only to have your employer suddenly announce a new policy that cuts your compensation in half.
This is often done through quota or “target” adjustments that make it harder to qualify for commissions and retroactive policy changes that violate your initial agreement. Many employees feel like they have no choice but to accept their employer’s new terms, even though employers don’t have the unilateral right to make those changes.
2. Firing an employee before the commission is paid
This is another common tactic, especially in fields with high turnovers and long sales cycles. Employers sometimes take advantage of the fact that most employees (especially young ones) don’t know that they’re still legally entitled to their commission after termination.
3. Hiding behind complicated commission formulas
Finally, some employers use overly complicated formulas, opaque calculations and vague descriptions to obscure what employees are owed in commission. Workers often find themselves unable to challenge their paltry payments because they can’t understand how they were calculated – and that may be by design.
When you work in sales, you may live or die based on your commissions – so you have every right to demand what you are due. If an employer has cheated you out of your commissions, legal guidance may be in order.