They Keep Changing My Compensation Plan

Changes to a compensation plan can be frustrating and confusing, especially when they occur without clear communication or explanation. Whether it’s unexpected adjustments to your salary, commission structure, or bonuses, these changes can leave you feeling undervalued and uncertain about your financial stability. In Massachusetts, employers must follow specific rules and guidelines when modifying compensation plans, and employees have rights to protect themselves against unfair practices.

At Gordon Law Group LLP, we specialize in employment law and help employees understand and protect their rights in the workplace. If your compensation plan is frequently changing, here’s what you need to know and the steps you can take to address the issue.

Understand the Basics of Compensation Plans

• A compensation plan outlines how you are paid for your work, including salary, hourly wages, commissions, bonuses, and other benefits.
• Changes to a compensation plan must align with your employment agreement and state laws. If changes are made retroactively or without notice, they may violate the Massachusetts Wage Act.
• Any changes to commission structures must comply with state rules, as commissions are considered wages under Massachusetts law.

Your Employer’s Obligations When Changing Compensation Plans

• Employers are generally allowed to change compensation plans, but they must provide clear communication and advance notice.
• Changes cannot reduce pay for work already performed. For example, if you earned a commission under the old plan, your employer cannot retroactively apply the new terms to reduce your earnings.
• Compensation changes should not be discriminatory or retaliatory. If you believe your employer’s actions are tied to bias, you may have grounds for a claim under Massachusetts employment discrimination laws.

Common Issues with Compensation Plan Changes

• Lack of Notice: Employers must inform you of changes to your compensation plan before they take effect. Sudden or retroactive changes are often illegal.
• Unclear Terms: If the new plan lacks transparency or clear guidelines, it can create confusion and disputes about your pay.
• Disproportionate Impact: Changes that negatively affect certain groups of employees more than others may raise legal concerns under anti-discrimination laws.
• Violation of Agreements: If you have an employment contract or agreement, your employer must follow its terms when implementing changes.

What to Do If Your Compensation Plan Keeps Changing

• Review Your Employment Agreement: Start by carefully reviewing your employment contract or offer letter. Look for clauses related to compensation, commissions, or bonuses to determine if your employer is violating the agreement.
• Document the Changes: Keep records of the original compensation plan, any updates or announcements, and how the changes have affected your earnings. This documentation can be critical if you need to file a complaint or pursue legal action.
• Discuss the Issue with Your Employer: Request a meeting with HR or your manager to discuss the changes. Ask for clarification on the new terms and express your concerns about how the changes were communicated or implemented.
• Consult an Attorney: If your employer refuses to address the issue or you believe the changes are illegal, consult an experienced employment lawyer. At Gordon Law Group LLP, we help employees in Massachusetts navigate complex workplace disputes, including compensation issues and wage violations.

Legal Protections for Employees in Massachusetts

• Massachusetts has strict wage and hour laws to protect employees from unfair compensation practices. Under these laws:
  • Employers must pay all earned wages, including commissions and bonuses, on time and in full.
  • Changes to compensation plans must be applied prospectively and cannot reduce earnings for work already completed.
• If your compensation plan changes are part of a larger pattern of unfair practices, such as retaliation or discrimination, you may have additional claims under state and federal laws.

How Gordon Law Group LLP Can HelpEvaluate Your Case: We’ll review your employment agreement, compensation plan, and any changes to determine if your employer has violated the law.