Santa Rosa, CA asked in Employment Law for California

Q: Is it legal for a company to change the way employees get paid without prior notice? notified same day went into effect

For example: We used to get paid hourly + 10% commission, off every job, and little bonuses for selling and installing as a service plumber. One day, the manager notified us that the way we get paid would drastically change on that same day. Now we get paid hourly, but we have a quota to meet every pay period in order to get any commission and no bonuses anymore. IE: we have to sell 25k in two weeks to get 4%, 30k for 8%, and 45k, for 12%. Most plumbers sell and install 45k in one month, making these numbers almost impossible to reach. 25k is doable, but if Half of it happens to be in the last pay period and half in the new one, we don’t get any commission. All of our pay has been cut in half, as we are only getting paid hourly, due to these difficult to reach numbers.

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2 Lawyer Answers
Maya L. Serkova
Maya L. Serkova
Answered
  • Orange, CA
  • Licensed in California

A: In California, all employees are considered at-will unless there is a contract to the contrary. At-will employment means the employer may change the terms of your employment at any time, provided it does not violate anti-discrimination laws. As long as you are being paid at least the minimum wage for all work hours, I do not see a problem with a new commission structure from a legal standpoint. Best of luck.

Sincerely,

Maya L. Serkova

Neil Pedersen
Neil Pedersen
Answered
  • Westminster, CA
  • Licensed in California

A: Your employer does not violate the law if it changes how you are paid from the point you are notified going forward.

In California you are considered to be employed on an at will basis unless you have an agreement with the employer to the contrary. The at will power of an employer allows the employer to change the terms and conditions of your employment, including you amount of pay and how it is calculated.

What the employer could not do is to change the amount or way you are paid that would have a retroactive effect, i.e. for time you have already worked before being notified.

There is nothing unlawful about an employer giving you goals that are impossible to reach either.

Your choice, as an at will employee, is to find another job and leave at any time and for any reason or even no reason at all, if you do not like the new terms being offered by your employer.

Good luck to you.

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