HR Chat: Compensation Changes

You operate a business with a team of five sales representatives. Currently, each employee receives a guaranteed salary along with a commission based on the sales they generate. However, due to a decline in revenues, you are considering adjustments to the compensation structure for underperforming sales representatives. The proposed change would transition them to a commission-only plan, but at a higher percentage to provide more incentive.  Is it legal to implement this change without the employees’ agreement? If so, what steps should be taken to ensure the change is legally compliant?

If you’re considering changes to your employees’ compensation plan, it’s important not to handle it on your own. With an affordable subscription to myHRcounsel, you can consult with our team of attorneys to ensure the changes are made in compliance with the law. We can help draft updated agreements for your sales team and ensure you’re following all applicable local, state, and federal regulations.