Commission Paid In Arrears And Furlough

B3nj0e

I’m looking for a little advice as I’ve been placed on Furlough due to “not enough work” (despite there being more than enough work) and I’m also commission based. 

Commission is paid 1 month in arrears, example January payments from Clients - My % Commission will be in February’s pay. 

I was officially placed on furlough April 23rd with my payday being the very next day - I received my commission as normal on April 24th but I’ve been told that I’m not eligible for subsequent commission as I’m on the furlough scheme.

is this true as payments made the to company prior to me being placed on furlough will have accrued commission which would have been paid on my next pay day.

i feel like they have furloughed me for the sole purpose not to pay commission.

JakeMM

When the furlough scheme was announced, companies were told they would be able to top employees wages up to 100%, but I don’t know of anyone who has!

Is the commission less than the 20% difference to your regular salary or more? Maybe try that angle?

Alternatively, I’d put something in writing about the fact that they’ve withheld earnings from you as set out in your contact. State that if it can’t be paid during the furlough scheme, you still expect full payment plus interest as and when the payment can be made.

The late payments act is usually used for business to business - but it states 8% per year plus the base rate is a fair interest to charge. 

Jeremy535897

Contractual commission should be included in the calculation of pay. See
https://www.gov.uk/guidance/work-out-80-of-your-employees-wages-to-claim-through-the-coronavirus-job-retention-scheme

"What to include when calculating wages

The amount you should use when calculating 80% of your employees’ wages is regular payments you are obliged to make, including:

• regular wages you pay to employees
• non-discretionary payments for hours worked, including overtime
• non-discretionary fees
• non-discretionary commission payments
• piece rate payments

You cannot include the following when calculating wages:

• payments made at the discretion of the employer or a client - where the employer or client was under no contractual obligation to pay, including:
  • any tips, including those distributed through troncs
  • discretionary bonuses
  • discretionary commission payments
• non-cash payments
• non-monetary benefits like benefits in kind (such as a company car) and salary sacrifice schemes (including pension contributions) that reduce an employees’ taxable pay

The entirety of the grant received to cover an employee’s subsidised furlough pay must be paid to them in the form of money. No part of the grant should be netted off to pay for the provision of benefits or a salary sacrifice scheme."

B3nj0e

Thanks for the response.

My Commission makes up around 60% of my annual so it’s quite a significant amount.

For the sake of furlough, I would be entitled to the full £2500 as my contract stipulates I will receive a Commission payment for X amount of sales paid in arrears the following month there for it is non-discretionary. 

so to me, all payments from clients for work done BEFORE furlough date would still be payable and then anything after would not be. 

Whilst £2500 per month is absolutely liveable and given the circumstances surrounding this awful scenario I’m thankful for anything.

That being said, My employer stands to PROFIT hugely off the situation by Furloughing me (Saving Him Salary and Commission Payments) whilst my clients are continually placing orders during this time and my sales figures have not dropped significantly during the COVID-19 outbreak.

Furloughed information : “so long as the company is unable to provide you with work"

Given I work in sales on a commission basis (and a small salary) it is in my best interest to push for work/sell as much as possible, if sales don’t perform there is no work to manufacture.

The only people that have been furloughed in manufacturing side are people with underlying health problems or of whom have asked to be.

I’m personally 60% up on sales first quarter vs last year.

I’m thinking this is a way of constructing / paving a way to get rid of me.

I was offered voluntary redundancy too with a extremely small figure.

Jeremy535897

Any commission you have earned should be paid. I believe your furlough calculation should include commission too. What you say concerns me though. If your clients are still buying while you're not there, is the business really dependent on you?

B3nj0e

So it’s best I seek an employment law solicitor as I’ve been told this will not happen.

Given I brought the clients in I would say yes but that’s because I’m a sales guy.

There’s a huge amount of work prior to orders being placed (such as concept, samples, approvals ect ) which are worked on weeks/months in advance even years in some cases.

Alongside “repeat” business.

Whilst there has not been much of a dip as of yet, I would anticipate they will be once things that where being worked on over the months have been completed.

Jeremy535897

I wish you good luck in getting a fair outcome.