I am a new hire at a Fortune 100 tech company. It’s a sales position, and this is my first job out of college. Just days into the job I landed my first sale — a big one for a $250,000 software contract. I am about to close my second sale, this one for a $100,000 contract. I was excited until I was told that because my compensation package had not yet been signed and finalized, I would not be receiving nearly $5,000 in commission for these deals. I’m angry, and I don’t know what to do to get paid and make sure this doesn’t happen again.
In a dream world, you’d pick up the phone, call the clients and say, “I’m sorry. My boss forced me to lie to you about the service you’d receive. I recommend that you don’t do this and go to our competitor.” Then you’d walk out and into a new job where they treat you like a human.
But this is not the movies, and the reality is that your boss is a jerk. The likelihood of you having a backup job that you can go to immediately is pretty darn slim. And managers who are jerks about things like this are bound to be jerks about other things, so you need to tread lightly. You are probably stuck in this job for at least a little while, so let’s go for your best bet of being treated properly.
It could be illegal.
If you have an offer letter that states a pay and commission structure, removing the commission after you’ve already done the work may violate the law. Offer letters aren’t generally binding, but you do have to notify employees before they do any work that you are lowering their pay.
If your offer letter was clear about those things, take it to your boss and say, “My understanding when I accepted this job was that this had all been sorted out and that I would receive commissions based on this schedule,” and then hand over the offer letter.
Now, there may be some blustering, but this should actually solve the problem. You can also mention that if they don’t offer you the commission based on the offer letter, there may be legal implications.
They can certainly change the commission structure, but not after you’ve done the work. They have to do it before.
It could be legal.
If you accepted the job based on something verbal like, “We’ll work that out later,” then it could be legal for them to deny a commission. That doesn’t make it a good idea, it just might not be against the law. As a word of caution to others, don’t take a job until all of the details are ironed out.
Regardless of the legality, it’s immoral to cheat someone out of his earned commission.
Take it up the chain.
If your boss doesn’t go for the legal argument (or you didn’t have things finalized before starting the job), you need to escalate this issue up the chain. Your boss’s boss would be the first stop on the list. Because this is a very large company, they should have processes in place, and someone should recognize the absurd nature of this problem. Unless you are the only person doing this job (unlikely in a Fortune 100 company), this commission should be the same for other people doing the same job. It should be easy and logical to say, “I sold X, the commission should be Y. What do we need to do to make this happen?”
But if no one cares…
If no one recognizes that it is detrimental to the business to have sales people that aren’t properly compensated, you have a couple options. The first is to not close the second deal until your boss signs off on the commission structure. You may end up losing the deal altogether, but will that make you any worse off than you are now?
Your second option is to hire a lawyer. Lowering your pay by eliminating a commission without prior notification violates the law. A lawyer can give you an official legal opinion of what you are owed based on your offer letter and the laws. But keep in mind that when you pull out the legal guns you’ll probably damage the relationship with your boss and the company.
Your third option is to start looking for a new job, and when you find a new job, leave. Turnover is expensive — more expensive than your $5,000 commission, so they suffer a lot in this scenario. But finding a new job is very difficult, and the fact that you’ve been in this job for such a short time period will work against you.
Your last option is to suck it up and accept that your boss is a jerk. This isn’t a terrible option, actually. You’re out $5,000, but you still have a job, and in a Fortune 100 company there should be plenty of chances to move to a new position. Most large companies will require you to stay in a position for 12 or 18 months before transferring out. Since you’re already showing how successful you can be, you shouldn’t have a problem finding a manager that wants you sooner and will respect your work.
No matter what you decide, take the moral high ground here and appreciate the advantage of knowing from the start that your boss can’t be trusted. From now on, document everything. If you agree to anything verbally, make sure you confirm via email.