Change in Pay??

earlearl

Employee hired and pay amount agreed upon. Question?? Can the employer now renegotiate the pay amount based on what our clients are willing to pay us to have one of our employees come out to do work for them? We are in the consulting business. We are hired by clients to have our employees come to their location to do work. We would like to base our employees pay based on a percentage of what each client contract is negotiated at and have the flexibility to change pay amount each time an employee goes to a different location for another client. Somewhat like a temporary agency. Do we have to wait until someone new is hired to do this or can we renegotiate pay amount with our on-going employees? Thanks.

Pork

I would think that if our company contracts with a personnel placement or people leasing company that you have the right and ability to contract your rate of pay based on anything allowing you to pay that person for regular time less than 40 hours at minimum wage or greater + overtime, when appropriate. Each week you could change the actual rate of weekly pay based on your agreed to percent as long as the actual calculation does not go below the minimum $5.25 or the minimum for your state. This a question I would call to my friend Wage and Hour contact and seek their advice. My W/H contacts are very friendly and helpful eith these types of inquiry. Good Luck Pork

Theresa Gegen TX

This depends on a couple of things.

1. Do the employees have contracts that state how much they would be paid? If so, you are bound by the contract.

2. If the employees are at will employees, future pay can be renegotiated (NOTE: For work already completed, the employee must be paid at the agreed upon rates).

3. If someone just started working for you with a promise of being paid X amount, and shortly after they start, you say "Now, we are paying you Y", the employee may have some type of claim for promissory estoppel, etc.

Legally you may find out you are okay. But before you start monkeying with the employee's pay in this manner, you better think it through very carefully. Assignments at high paying jobs need to be given out equitably (or you risk an employee suing for discrimination, by saying "they are only giving me the low paying jobs"). Also, if all the employees are used to being paid a certain amount, they will not like it very much when the amount gets reduced on some jobs. The employees might decide not to work certain jobs because they don't pay enough. Then what do you do? Fire the employee or assign someone else? Either way you are in a world of hurt. The headache may not be worth the short term money savings.

The types of companies that generally use this type of pay system, like temp agencies, really don't have much employee loyalty. Their employees come and go and that's okay with the agency. But if you are selling a much higher end consulting product, employee loyalty might be a lot more important to the health of your business. One thing your company may decide to do, is turn down the business (GASP) that is not willing to pay your reasonable rates. Selling your services at a low rate can get you more business, but depending on the type of business you are in, it can backfire (who wants to take a make or break the company issue to the cheapest consultant they can find??)

Good Luck!!