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Sounds like your boss has turned your dept into a room full of sub-contractors.
I see a few things here...
- your company is in damage control mode.
- I see layoffs in the future, and outsourcing. (I'll call you if I need you, and if I don't call you, you don't get paid.)
Is there a lot of dead weight in your company?
Not actually my company..... Thank Goodness!
I agree that this company needs to layoff people. The work just isn't there to maintain the staff they have. That's a shame, but it's also the reality of the economic times we're in.
Where I have an issue is the way they're going about it. To selectively change the pay structure for some, but not all employees that work in the same dept, perform the same duties and have the same job descriptions indicates they have an agenda. In my opinion, this is the agenda:
If we change the way these employees are paid, they won't make any money.
If they don't make any money, they will quit.
If they quit they won't be able to collect unemployment and we won't be subject to higher unemployment tax rates.
The best answer is to contact your local labor office. They can tell you what is o.k. under your laws. What goes in CA may not be the same for FL. What can be done in NY may not be done in TX.
I get lots of people telling me that my compensation is illegal because i only get paid a set hour wage. If I work 20 hours a week I get paid for 20, I work 40 I get paid 40 hours, If i work 60 i get paid 60. I do not get overtime even if I work more than 40 hours. I get no additional pay for working nights, weekends or holidays. I get paid the same for each hour I work. People have told me I am required to get a break at this or that time. I am told they can not make me work 24 hours straight for several days. But they are not breaking any law even if the law say they cant do it because there are always exceptions and we fit in an exception.
Call your local labor office and let them say what is and isn't allowed.
The company told the employees that they now would receive "commission" based on the hours they worked on projects for customers instead of a salary. This change was not made across the board for all the employees in the department with the same duties/job descriptions, only about half. There are sales positions in the company that are paid on a commission structure. The employees in question were not transferred to this department or assigned other duties. Nothing changes except their pay structure.
Perhaps the company used the wrong verbage when they said "commission". Perhaps they should have called it a "billable" hours pay plan since the employees in question will submit their hours worked, by customer, each pay period. I've worked for a company where this was done. Of course, I agreed to that pay structure when I took the job.
I understand that many companies are in a tough position in this economy. No one likes to let people go. But, if they have to, the least they can do for the people affected is to do it in an above board manner. In my opinion, this company has failed that test. They clearly want the employees to quit instead of laying them off and effecting their unemployment rates.
Legal? Perhaps. Ethical? Not even close.
That whole scheme sounds absolutely RIDICULOUS and I bet it would NOT wash with most State departments of labor as an acceptable compensation plan. Why is it only for certain people and others not? It's just wrong on so many levels.
I hope the clients never find out or they are going bye bye.
I sure would if the only way the company that I am hiring's employees can make money and/or make more money is by padding the billable hours charged to me, the client!
I would advise anyone affected in that company to go "psst" to the clients and tell them about the plan and say, "Why do you need my company being the middleman collecting inflated fees from you when you can hire me as a contractor directly and save money?" (Note: this offer should only be made if there is no non-compete contract signed or if the time period of such has expired.)
I would also advise anyone affected in that company to consult with an employment lawyer ASAP.
They are not inside or outside sales people, but the time they spend on projects is billed to customers. This happened selectively to a few employees only. Of course the big problem is that there is no work right now to earn commissions on. No billable hours = No Pay.
I'm not in the US but I've been looking into working there. From what I've read it's only permissable to have someone on 100% compensation if they are doing outside sales.
Even then an outside salesperson is only exempt from minimum wage laws if their work meets certain criteria. From the Department of Labor:
http://www.dol.gov/whd/regs/compliance/fairpay/fs17f_outsidesales.pdf (broken link)
• The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and
• The employee must be customarily and regularly engaged away from the employer’s place or places of business.
It doesn't sound like the employees at your work fall under this category so they shouldn't be on 100% commission.
This situation is getting more wide spread. I am currently the VP of a manufacturing company. I have been advised that I will changed from salaried to commission only, based on the value of the projects that I negotiate. Since my job has been a salaried, corporate exec position and I am now in effect being made into a sales person, havent I been terminated from my original position? I will quit when this takes effect. I will also do some checking into our local labor laws in the mean time.
This situation is getting more wide spread. I am currently the VP of a manufacturing company. I have been advised that I will changed from salaried to commission only, based on the value of the projects that I negotiate. Since my job has been a salaried, corporate exec position and I am now in effect being made into a sales person, havent I been terminated from my original position? I will quit when this takes effect. I will also do some checking into our local labor laws in the mean time.
How painful... to me it sound like they are trying to avoid giving you a severance package, so they are driving you to quit.
This situation is getting more wide spread. I am currently the VP of a manufacturing company. I have been advised that I will changed from salaried to commission only, based on the value of the projects that I negotiate. Since my job has been a salaried, corporate exec position and I am now in effect being made into a sales person, havent I been terminated from my original position? I will quit when this takes effect. I will also do some checking into our local labor laws in the mean time.
Look up the term "constructive discharge" and prepare to use it in your favor if you quit and apply for unemployment insurance benefits and the employer opposes them.
When it comes to what is happening to you, are they doing it to other people of your same rank and job title? If not, how are you different from those other people? If you are a member of a protected class you may be entitled to sue your employer for discrimination under Title VII if you can prove negative disparate treatment.
I would think it all depends on what kind of contract you have with your employer or what kind agreement, if any, you have made when you were first hired. I think this would be a good time to contact a legal professional who could answer your questions. I would go to the labor board only as a last resort, if you want to keep your job. Most people don't know it, but an empoyer can git rid of any employee they decide to get rid of.
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