Earned commission during Maternity Leave

muhandis

I'll try to make this as succinct as possible.

I've worked for a firm for the past 3 years and my annual pay structure is

- Basic salary (for managing a team)

- Commission paid monthly of 30% on all business I write, paid in the month that my employer receives funds (business written in say January gets 'completed' usually over the next 3 months, a bit in Feb, a bit in March and the rest latest by April)

- My employer offers only statutory maternity pay, no more

So, I'm going on maternity leave in April and talked to my HR person about this. I'm the first person on commission to go on ML (it is a bit of a boys club), so I wanted to be clear as to what the terms are as to the commission that I earn in the 3 months preceding ML.

She said that I will receive SMP based on my payslips in Oct and Nov (which I already knew from the gov.uk SMP calculator) but she will have to check and get back to me on the commission. I asked her to give it to me on an email.

From the HMRC website, it appears that all employers can claim back at least 92% of SMP paid to an employee (it's 103% for small businesses but that isn't applicable in this case).

That being the case, to my mind, there isn't any logical reason for my employer to withhold commission that I have earned for the employer before going on ML irrespective of when the business I write gets completed.

Going by past form, my employer will fight to pay whatever minimum it can get away with so I want to be prepared with my arguments and in case it ends up that I will not be paid any commission once I go on ML, I can at the very least dial down by the new year and stick to just managing the team in the first quarter leading up to ML and not bust my !!! doing 12 hour days talking to clients.

I'd be interested in hearing other people's thoughts on this please.

Thanks,

K

agrinnall

As long as your basic pay is at least NLW then anything to do with commission will be contractual, so you'll be due whatever it says in your contract.

muhandis

My contract says I'll be paid 30% of the business that I write, but there isn't anything about what happens when on maternity beyond saying that my employer only pays SMP (which I guess would be applicable even if the contract made no mention of it).

agrinnall wrote: »

As long as your basic pay is at least NLW then anything to do with commission will be contractual, so you'll be due whatever it says in your contract.

Undervalued

muhandis wrote: »

My contract says I'll be paid 30% of the business that I write, but there isn't anything about what happens when on maternity beyond saying that my employer only pays SMP (which I guess would be applicable even if the contract made no mention of it).

Well then providing your basic salary is at least the national minimum wage then I fear that is all you will get.

Similarly, according to your contract, you do not earn any commission when you are on holiday or off sick?

muhandis

Undervalued wrote: »

Well then providing your basic salary is at least the national minimum wage then I fear that is all you will get.

If that is indeed how it turns out then I guess I'll have no option but to stop writing any business from the new year and do 9-5 for 3 months!

Undervalued wrote: »

Similarly, according to your contract, you do not earn any commission when you are on holiday or off sick?

Nothing mentioned in the contract in this regard but I've always been paid commission I've already earned (ie on business I've written) irrespective of whether I was on leave or not.


To be clear, each bit of business I write is basically a sale made by me for which my employer receives £X (as commission on the sale) and I get £0.3X (from the commission that my employer gets) in the month that my employer receives £X.

iammumtoone

Do you intend to go back after your ML.

The only issue I can see with your plan is being commission based I assume you are expected to perform at a certain level. If you bring in no sales for the company (ie no commission) for three months, would that trigger discussions about your ability to do the job?

Tammykitty

I think you are entitled to continue to get your commission paid.


However the first 6 weeks of SMP are paid at 90% of average weekly earnings, so this will already have the commission factored into it, so I don't expect they will pay more commission on top of this?


These weeks could be worth querying how the employer intends to work out the 90% pay?


It could be more beneficial for you, if it was 90% of basic pay, plus any actual commission due?


From week 7 onwards, I think you should still be getting the commission on top of the SMP, as the commission was actually income earned from pre maternity leave

muhandis

While I will actively looking for other jobs closer to home during my 6 months of ML, I do intend to go back in the event that nothing works out.

Not writing much new business shouldn't a problem as the basic pay is meant to cover the team management part of my work. But even if it does, I'm not too bothered as long as I have a place to go back to immediately after ML

iammumtoone wrote: »

Do you intend to go back after your ML.

The only issue I can see with your plan is being commission based I assume you are expected to perform at a certain level. If you bring in no sales for the company (ie no commission) for three months, would that trigger discussions about your ability to do the job?

muhandis

As per HR, SMP is calculated strictly based on the output of the employer calculator on gov.uk which considers the taxable amount on the payslip for the relevant months (October and November in my case) irrespective of whether it's called basic/commission/bonus/etc. They can't pay any less than that.

So yes, the 90% would include commission I was paid in Oct-Nov and if my employer were bearing the cost of the SMP, I would have no compliant in them withholding commission during ML. But they get almost all the SMP paid back from HMRC.

Tammykitty wrote: »

I think you are entitled to continue to get your commission paid.

However the first 6 weeks of SMP are paid at 90% of average weekly earnings, so this will already have the commission factored into it, so I don't expect they will pay more commission on top of this?

These weeks could be worth querying how the employer intends to work out the 90% pay?

It could be more beneficial for you, if it was 90% of basic pay, plus any actual commission due?

From week 7 onwards, I think you should still be getting the commission on top of the SMP, as the commission was actually income earned from pre maternity leave

TELLIT01

On the basis of the first part of SMP being paid on average earnings over the prior period, it would seem prudent to bring in as much business as possible in the next couple of months. That will have a direct bearing on those SMP payments.

muhandis

It's not based on the prior period. It's the last 2 paydays prior to 15 weeks before expected week of childbirth, so October and November for me.

TELLIT01 wrote: »

On the basis of the first part of SMP being paid on average earnings over the prior period, it would seem prudent to bring in as much business as possible in the next couple of months. That will have a direct bearing on those SMP payments.