Having trouble understanding if my co-workers and I are getting a fair deal in our NEW comp plan. Would appreciate any help here and an explanation either way.
Under the old comp plan
- Commissions are paid 10% per month on net margin paid the previous month (exmp: 50k in net margin paid by customers in January 2015 = 5K in commissions paid in February)
- The following year, in March of 2016, a 11% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2015) (exmp: 600K "collected net margin" in 2015 = 66K Bonus paid in March of 2016)
Total compensation for what was paid in 2015 (Assumes all 12 months were equal to the above example = 126K
Under the new comp plan
- Commissions are paid 16% per month on net margin paid the previous month (exmp: 50K in net margin paid by customers in January = 8K in commissions paid in February)
- The following year, in March of 2017, a 5% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2016) (exmp: 600K "collected net margin" in 2016 = 30K Bonus paid in March of 2017)
Question: Employer is claiming that commission for January of 2016 should only be 10% and not the new 16% as any "collected net margin" in December was under the old comp plan of 10%. Then 16% monthly commissions will be paid starting in February of 2016. The question is, should the employer be paying 16% commission rate in January even though what is paid in January commissions was collected in 2015 under the old comp plan or is 10% the correct commission rate for January? If 16% is not paid in January, is the additional 6% of commissions paid to the employees ever?
Any help here or explanations either way is much appreciated.
Under the old comp plan
- Commissions are paid 10% per month on net margin paid the previous month (exmp: 50k in net margin paid by customers in January 2015 = 5K in commissions paid in February)
- The following year, in March of 2016, a 11% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2015) (exmp: 600K "collected net margin" in 2015 = 66K Bonus paid in March of 2016)
Total compensation for what was paid in 2015 (Assumes all 12 months were equal to the above example = 126K
Under the new comp plan
- Commissions are paid 16% per month on net margin paid the previous month (exmp: 50K in net margin paid by customers in January = 8K in commissions paid in February)
- The following year, in March of 2017, a 5% Bonus is paid on all "collected net margin" for the previous year (January 1 - December 31st of 2016) (exmp: 600K "collected net margin" in 2016 = 30K Bonus paid in March of 2017)
Question: Employer is claiming that commission for January of 2016 should only be 10% and not the new 16% as any "collected net margin" in December was under the old comp plan of 10%. Then 16% monthly commissions will be paid starting in February of 2016. The question is, should the employer be paying 16% commission rate in January even though what is paid in January commissions was collected in 2015 under the old comp plan or is 10% the correct commission rate for January? If 16% is not paid in January, is the additional 6% of commissions paid to the employees ever?
Any help here or explanations either way is much appreciated.