In a recent article on The Telegraph entitled, “Companies Braced for Jump in Payroll Costs as Workers Could Soon Claim Commission While on Holiday,” it was announced that millions of workers in the United Kingdom are soon going to be entitled to extra holiday pay.
The ball started rolling when a commission sales rep argued that he suffered a financial loss while on Personal Time Off (PTO) because his pay check only included “base pay” and not commissions when he returned from holiday. His employer, British Gas, and the Government argued that under UK legislation, it is standard practice for holiday pay to be calculated at the basic rate.
Mr. Lock cited that “more than 60% of his total wage packet was made up of commission payments, based on his sales. However, his holiday allowance only covered basic pay.”
The case was brought to the European Court of Justice where it was ruled that holiday pay should indeed include commission. The details on the new commission payment structure have yet to be finalized. However, with millions of employees in the UK having variable pay arrangements, calculating holiday pay can prove to be quite complex.
In the United States, a recent LinkedIn article, “The Face of Changing PTO Laws,” clearly noted that “many American states and cities are already putting paid time off (PTO) laws into effect”, while Federal sick leave laws appear to be coming soon. Business owners and managers are advised to closely monitor developments on commissions with regard to the new PTO laws.
With all these changes in the compensation structure (especially regarding commissions) happening all over the world, do you think regulations for US employers, will follow suit in updating their sales reps’ employment policies and sales rep agreements?
What will the financial impact be if a similar requirement to include commissions in PTO pay were to be implemented in the USA? Besides the obvious increase in employer costs, will your sales commission management tools be ready to manage the change?
She has a bachelor's degree in Psychology and she's a strong believer in the powers of positive reinforcement as well as work-life balance.
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