Q: Is it legal for an employer to change my commission compensation plan that is retroactive?
I made a complaint to HR because of constant bullying by the COO. I also reported billing fraud. I was told that they would have to tell the COO of my complaint and that there would be an investigation. I never heard back from HR. The bullying has continued and the COO was instrumental in developing my new compensation plan that reduces my income significantly. My boss told me that the COO put stipulations in the plan that I can’t meet so and is limiting my ability to earn so that he can “run me out”. I was the top new revenue earner for 2022. They also want to make this plan retroactive to January 1.
A:
Under California law, an employer generally cannot make retroactive changes to an employee's compensation plan. This means that any changes made to your compensation plan after you have already performed work should not be applied retroactively to reduce your pay for that work.
However, there may be exceptions to this rule depending on the specific terms of your employment contract or agreement, and the circumstances of the changes made to your compensation plan. It is also possible that the employer may have the ability to change the commission plan going forward, but not retroactively.
In addition, California law prohibits retaliation against employees for making complaints about illegal activities, including bullying and fraud. Retaliation can include adverse employment actions, such as changes to compensation, demotion, or termination.
If you believe that your employer is retaliating against you for reporting the bullying and fraud, or if you believe that your employer is making changes to your compensation plan in violation of California law, you may want to consider consulting with an attorney who is experienced in employment law. An attorney can help you understand your legal rights and options, and can advise you on the best course of action to protect your interests.
A: No. An employer cannot retroactively reduce your compensation. You may be the victim of whistleblower retaliation. You should consult with an employment lawyer. Most provide free consultations.
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