Sales comp with disability kicker - a bit long, bear with me
Pricehcs
128 Posts
A long one, I know, but the details are required for the question.
A little background. We have a sales commission plan built on hard (revenue and profit) and soft (site visits, sales calls, new clients, training course attendance). Salespeople are rewarded based on their personal achievement of the soft targets combined with their office's achievement of the hard targets. This incentive is paid out on a quarterly basis.
This year, we had a salesperson out on disability for maternity leave. As a result, she did not hit her soft targets, however, the office did hit its hard targets. We agreed that a) she should be paid out on the hard target incentives and b) she should be paid as a percentage of her salary for the quarter, not for her EARNINGS, which would have been significantly less for STD (60%) and FMLA (unpaid) for the quarter.
As you might expect, her operational manager is having heartburn over paying this. I have sufficiently refuted this argument and she will be paid for the quarter. However, he has made another suggestion that I need to evaluate. The suggestion is this: putting language in the 2005 compensation plan that specifically states that compensation will be paid based on EARNINGS, not SALARY, for each quarter. This would shrink (not eliminate) a salesperson's commission for hard targets during any quarter they were out on disability. I believe that we could write this in a non-discriminatory way (by saying disability leave is disability, regardless.) I am more concerned with the legal aspect (not to mention the employee's personal perception) that this plan change would be implied discrimination, as it would appear to be a) aimed right at a specific sales person and b) be made right on the heels of her disability leave due to pregnancy.
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
A little background. We have a sales commission plan built on hard (revenue and profit) and soft (site visits, sales calls, new clients, training course attendance). Salespeople are rewarded based on their personal achievement of the soft targets combined with their office's achievement of the hard targets. This incentive is paid out on a quarterly basis.
This year, we had a salesperson out on disability for maternity leave. As a result, she did not hit her soft targets, however, the office did hit its hard targets. We agreed that a) she should be paid out on the hard target incentives and b) she should be paid as a percentage of her salary for the quarter, not for her EARNINGS, which would have been significantly less for STD (60%) and FMLA (unpaid) for the quarter.
As you might expect, her operational manager is having heartburn over paying this. I have sufficiently refuted this argument and she will be paid for the quarter. However, he has made another suggestion that I need to evaluate. The suggestion is this: putting language in the 2005 compensation plan that specifically states that compensation will be paid based on EARNINGS, not SALARY, for each quarter. This would shrink (not eliminate) a salesperson's commission for hard targets during any quarter they were out on disability. I believe that we could write this in a non-discriminatory way (by saying disability leave is disability, regardless.) I am more concerned with the legal aspect (not to mention the employee's personal perception) that this plan change would be implied discrimination, as it would appear to be a) aimed right at a specific sales person and b) be made right on the heels of her disability leave due to pregnancy.
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
Comments
What About Bonuses and Commissions?
If you ordinarily pay employees an end-of-the-year bonus, an employee who took some, or all 12 weeks, of FMLA leave may still want to collect that bonus. Under the FMLA, employees may still be entitled to certain bonuses that they would have received had they not gone on leave.The regulations categorize bonuses in the two following ways:
• Attendance and Safety. If you give a bonus to an employee for perfect attendance or safety, you cannot count an employee’s FMLA absence against him when calculating this bonus. For example, if an employee takes intermittent FMLA leave for three hours every Wednesday for cancer treatment, but he has perfect attendance otherwise, he is entitled to any perfect attendance bonus that you normally pay out.
• Performance and Production. If you give out a bonus based on employee performance or production, you must pay the bonus to employees on FMLA leave in the same way you pay other employees who are on either paid or unpaid leave. For example, if an employee ordinarily would qualify for a monthly bonus in December, but she goes on FMLA maternity leave in November, she is entitled to the bonus if you regularly give monthly bonuses to other employees who are on paid or unpaid leave.
Although I agree that a change in policy right now would cause the perception that the change is directed at her, I see nothing illegal in your clearing up the company's intent, moving forward. Bonuses and perks for employees based on goals and targets can be suspended during time periods when they have no reasonable means of achieving them.