Boss Withholding Commission- Situation not covered in contract.
December 3, 2014 12:03 AM   Subscribe

I am an insurance salesman for a national insurance agency and I am based in North Carolina. We get paid a flat fee per policy written and issued based on a a pre-negotiated contract. Yesterday I turned in my monthly sales report and commissions (on time) and today my boss is telling me he is only paying me for 2/27 policies because the other 25 are missing "client relations" information.

Client relations information is information such as occupation, recreation activities, and money information and has no bearing on whether policies issue, it is used for future marketing. In my contract it says I will be paid "per issued contract at rate $x for each policy issued by the 30th of the previous month". No where does it say I must collect marketing information and this hasn't been enforced since I started work here in July. My commission is roughly 50% of my paycheck so this will have a significant impact on my family finances. This is my bosses first year as an agency owner so I'd like to give him the benefit of a doubt about this and could use some help finding resources to back me up if I am indeed right that I should still be getting my commission. My paycheck doesn't issue until the 7th so there is still time for my boss to make this right. A script of what to say or how to handle this would be very helpful, immediate calls for a lawyer are less helpful because I'd rather get paid and get to keep my job, I really do feel like this is an honest misunderstanding. Thank you for your help.
posted by anonymous to Work & Money (12 answers total) 2 users marked this as a favorite
How desperate are you for the job? In other words, what kind of barrel is he holding you over?

To be perfectly honest I think you're being screwed - the profit received for the policy must cover your commission, because any profit on follow-up marketing isn't guaranteed. So the company's going to get the cash for the policy and keep your share.

Am I right in assuming that, as a customer, there's no reason for me to give you that "client relations" information? What, exactly, would happen if I wanted the policy but refused to answer questions about what I do on the weekends? Have you got any data protection laws? What do the other agents do? Have you been singled out, or is he holding out on everyone?

I think my approach would be "I completed the work, pay me, just like you've done every month since July. If you want different work completed, we need to renegotiate my contract, but you still have to pay me for this work". Then I'd want to negotiate a separate commission for the client relations data. You're a salesman, negotiate like one. But like I said, I don't know what kind of a barrel you're over.
posted by Leon at 1:31 AM on December 3, 2014 [8 favorites]

Your contract absolutely does cover the situation - if the contract is issued, you get paid! Anyway, I find that a polite letter saying, in effect, "I'm not saying you're wrong, it's just that what your company formally agreed with me takes precedence, so let's do that, and if you agree then you're being very understanding and fair", gives your boss a way to save face.

"Dear boss,

Thanks for your message the other day; very motivating! I wasn't aware that not including client relations information could cause you to want to withhold commission, though I will of course endeavour to include it from now on.

On the matter of the commission due, [your company name] agreed to pay commission of "$x per per issued contract" in its contract with me. So since I caused 27 contracts to be issued, then our contract specifies that $y commission is to be included in my pay for [month] (due on the 7th). I couldn't find anything that might cause that to change if client relations info wasn't included. Does that sound fair?

Again, I'm happy to include client relations information in future; I just wasn't aware of the issue until you raised it the other day.

Hope that all makes sense and that you understand how important this is to me. I look forward to bringing in even more $ for [company name] next month!


posted by cogat at 2:17 AM on December 3, 2014 [9 favorites]

the other 25 are missing "client relations" information

As a gesture of goodwill, offer to go back to the clients and collect the missing information _after_ you have been paid in full.
posted by Dr Dracator at 2:56 AM on December 3, 2014 [5 favorites]

he is only paying me for 2/27 policies because the other 25 are missing "client relations" information.

I see three distinct possibilities (from a far):

1) He's emphasising how important the missing data is to him.
2) He's under pressure to reduce costs and is looking at technicalities.
3) He wants you to quit.

Number 3) doesn't seem likely as he wouldn't want to risk a breach of contract suit, when the contract very clearly spells out the terms of your employment. He would pay you out and terminate your contract.

Number 2) could happen, although it's not the most sensible thing to do, as it as all the risks of terminating the contract, whilst also demotivating the sales team.

Which leaves 1). Obviously this data is important to him, and it sounds like he's sending a message as to exactly how important that data is. The reason being is that he's withholding 93% of your contract commissions, commissions you are (assumably) due under your contract.

So the real question is why is he withholding 93% of your contract commissions when you are entitled to them under contract?

If he perceives this to be work implicit in the contract, you would do well to explain to him that you had a different interpretation, and suggest that you amend the contract moving forward to include all the deliverables expected. As some consumers will not want to disclose that information, there is an appropriate "reasonable efforts" vs. "best reasonable efforts" clause to be attached to it.

In terms of a script, perhaps it sounds something like this:

Observation: "Hi, I have only been paid for 2 of the 27 policies I sold last month."

Feelings: "I am confused because you said this is because client relationship information wasn't included. I wasn't aware that information was required, and not all consumers are going to provide it for me."

Need: "I need clarity on exactly what is expected. If collecting client data is part of the contract, I need to know that, and I need clarity on what happens if I cannot collect that data."

Request: "I would ask that you pay my commission in accordances with the current contract, and that we amend the contract moving forward to include all the information that you need from me."
posted by nickrussell at 3:09 AM on December 3, 2014 [5 favorites]

I'd suggest you start looking for another job. If he's screwing you on 80% of your commission out of nowhere with no contractual backing, he's potentially doing it as part of last-ditch efforts to find money to keep your office afloat.

Either that or he'll keep finding technicalities to deny your commissions on. Either the office is on the way out or you are.

Contest it and point to your contract, but get some irons in the fire for a new job sharpish.
posted by Happy Dave at 3:16 AM on December 3, 2014 [12 favorites]

I'd be worried that he can't make payroll or has another major financial problem happening. The fact that this is his first year owning the business makes it even more worrisome in my mind.

Regardless, he owes you the commission you earned. If the extra info was critical enough to trigger withholding payment, he would have/should have mentioned it in July.

I'd start looking for a new job.
posted by quince at 3:28 AM on December 3, 2014 [16 favorites]

My first thought is that he's in dire financial straights and this is a desperate attempt to keep cash flow.

I'd give him one opportunity to pay up, then I'd go to the national company.

"Joe, if you're in trouble we can work through it, but not paying me for my policies sold isn't acceptable. I have always been paid for what I've sold, whether or not the customer relations information has been present. We have a contract and that isn't in it. Now, what's going on?"

Frankly though, this guy is not acting in good faith. Therefore I'd be going over his head. You have nothing to lose here because this relationship is over. He's willing to dick you around over this and only someone who is either craven or desperate would do it. Can you talk to a district manager or someone at the national insurance company about this? If they're paying him, he MUST pay you.

Unfortunately, you can sue him in court over it, but if he's stooping to this, he's already too broke to pay you.
posted by Ruthless Bunny at 4:52 AM on December 3, 2014 [14 favorites]

I totally agree with Dr Dracator. You are totally right and your boss is totally wrong, but pretending to acquiesce is probably your best bet to get paid (assuming the money is even there at all, as others have noted). In the meantime, start looking for a new job.
posted by telegraph at 5:16 AM on December 3, 2014 [1 favorite]

A lawyer doesn't have to go into immediate and irreversable sue-mode. Most lawyers don't want to go straight to litigation for stuff like this. They can help you understand your contract, your rights, and provide advice on how you should proceed. Your boss never has to know you talked to a lawyer, and you have the benefit of knowing exactly what you're entitled to. Depending on how much you make from commission, you may be able to get a free consult or pay an hour of their time to walk through the issue and formulate an action plan.
posted by Geckwoistmeinauto at 5:31 AM on December 3, 2014 [3 favorites]

In addition, if he doesn't pay and you talk to a lawyer, it's amazing what a letter from an attorney can do to motivate the other party to resolve a situation.
posted by azpenguin at 6:26 AM on December 3, 2014 [3 favorites]

Have you had any previous conversations with your boss about completing the information? Has he asked you to do it? Or did this just happen out of the blue with no warning? The only way this would be at all acceptable is if your boss has asked you about adding this information and you've ignored it because it's not covered in your contract. If that's the case, then he's trying to get your attention in the only way that he's decided will work.
posted by raisingsand at 11:34 AM on December 3, 2014

I like Cogat's script above, but I would leave out the "does that sound fair?" question and add that you will collect client info in the future and will do your best to obtain the missing info after you are paid for these contracts.

The bottom line is, you fulfilled your terms and he has to fulfill his. If he wants to amend them, he has to do so explicitly, and you have to agree. If you let him get away with this, he will think you don't know your own terms and are afraid to stand up for yourself. Not good.

Also, I agree that it would be worth putting out feelers for other jobs. This guy could be broke, or he could just bs a dick. Either way, not a fun situation.
posted by rpfields at 2:41 PM on December 3, 2014

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