Adequately Compensating Commissioned Employees
Q I work for a major retailer that has two types of stores: main branch stores equipped with a warehouse and customer service department, and satellite stores, which don’t have a warehouse or customer service department.
Salespeople at both types of stores are paid straight commission. But salespeople at the satellite stores are required to do customer service work, take payments on accounts, answer phones regarding customer service, sometimes load a customer’s merchandise and open and close the store. At the main branches, the salespeople don’t do any of these tasks and get paid on the same structure. Does this sound right?
--K.M., Santa Ana
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A Generally, an employer is not required to pay commissioned employees more money for work that is incidental to the commission work. Answering the phones, loading merchandise and opening and closing the store may be considered incidental work. It is unclear whether the other activities you list are related to your commission work. I suggest you contact the state labor commissioner’s office, which is listed in the government pages of the phone book under Industrial Relations Department. Be prepared to discuss in detail those activities you perform beyond sales.
--William H. Hackel III
Employment law attorney
Spray, Gould & Bowers
Repaying Loan After Termination
Q During the Northridge earthquake, my house suffered more than $170,000 in damages. At the time, the company I work for offered interest-free loans to employees with extensive earthquake damage. I took a $25,000 loan and have been paying $412 per month through payroll deductions.
Now we have been informed that we will no longer have jobs as of Aug. 31. This is devastating because I am 61 years old with no financial resources besides my home. I still owe half the loan and, knowing it will be very difficult to find a job at my age, I don’t know how I will be able to pay that amount, other than using my severance money or my unemployment benefits.
Do I have any other way out of this? (And I don’t mean not repaying the loan.) For example, could I delay this payment until I sell my home? Since I have one more year till early retirement, could I make the company reassign me to another position until my early retirement?.
--P.S., Los Angeles
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A You have many options. The initial challenge is to gain a complete understanding of the terms of the loan. Many company loans require repayment upon termination of employment, especially when the loan is being paid through payroll deductions. You might be able to argue that the language is so vague that the payment schedule will continue after you leave the company.
Even if the whole loan comes due when you leave, you may have other options. Is there any discrimination or unfairness in the way workers are being laid off? It is possible that because you will be leaving only one year before you could retire, your employer may be guilty of age discrimination? In that case, you could use that as an independent claim, or at least as an inducement for them to cooperate with you in renegotiating the terms of the loan.
If you have been with the company a long time and it has promised to change your employment status only for good cause, you may have a claim for breach of contract. Again, determine if the layoff is being conducted fairly. Have you been deprived of “bumping rights,” through which an employee with less seniority than you should be laid off instead?
Be careful not to harm your chance to receive severance pay, however. Often, this is an optional benefit given at the employer’s discretion.
You implied that there are other positions open. Evaluate them and compare your qualifications with those of other candidates. Send a letter to your employer making your best proposal to transfer to another job.
Appeal to your employer’s sense of fairness. Stress your loyalty and long years of service. Consider offering your employer a trust deed on your home, so that the employer will know that it will be repaid, but on a delayed basis.
You could certainly delay payment on the loan until you sell your house. You could try to get your employer to cooperate, but even if the employer won’t, the worst it can do is sue you, which would probably take longer than the time necessary to complete the sale of your house. And the employer probably would not want to incur the financial expense of suing you when it can work it out very practically to its benefit.
--Don D. Sessions
Employee rights attorney
Universal City
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