Sales executives must still be paid their commission earned in October – even if they are put on furlough in November.
Off the back of bumper sales months, many sales executives will be worried about losing out if they are furloughed and potentially limited to the £2,500 monthly pay cap.
However, legal firm CG Professional has confirmed to Car Dealer that dealerships will be liable for this commission in line with their contracts of employment and this will need to be paid as normal in November.
This will apply to sales executives up and down the country as dealer bosses have already revealed to Car Dealer that they expect to put the majority of their sales staff back on furlough from today.
However, the furlough cash from the government can be used towards paying an employee’s commission.
Managing partner Stacey Turner said: ‘Dealers will be liable for any commissions earned by sales execs in October in accordance with their contracts of employment and in accordance with general implied duties of the employment relationship.
‘Unless the sales execs agree for this commission to be waived, capped or carried over then this will need to be paid as normal in November payroll.’
She added: ‘My view is that the employer can claim for any payments due to employees in the relevant “claim period”.
‘The commission for October is due and liable to be paid in November and therefore due and payable in the relevant claim period.
‘Therefore my view is that employers can use furlough monies towards these commission payments.
‘Employers will then need to top up wages if necessary, if the cap applies, unless the sales execs agree that it can be capped.’
She added that some of her clients are now in talks with sales executives about whether they can spread out commission payments, which would help cash flow but also stop staff being left with only their basic pay in December.
Turner said: ‘Quite a few of my clients are in discussions with sales executives around how commission is dealt with and whether commissions can essentially be spread out over the next few months.
‘The concern for execs will be their December pay as they may not have been selling in November.
‘So whilst they are in work in December and so are not furloughed, they may be left with just their basic pay.’
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