In a sales job can a company recruit employees on variable salary.. i.e without any fixed pay..
From India, Kolkata
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From India, Kolkata
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Dear friend,
One of the basic ingredients of employment is the creation of the relationship between an employer and an employee, with the feature of regularity in hiring the time and services of the employee under the continuous control and effective supervision of the employer. Here, the mutual considerations are the performance by the employee and the payment of salary by the employer.
However, Sales as a Unique Job
Sales is a job in which performance depends on many factors such as the product or service, its price, offers to incentivize intermediaries, levels of market competition, changing consumption patterns, in addition to the hard work and salesmanship of the employee involved. Therefore, the time spent by the employee at the disposal of the employer or on the job cannot be completely ignored in determining their salary. Thus, the regularity and assurance of a fixed salary at the end of the wage period become indispensable, regardless of whether the employee's performance can be objectively assessed quantitatively, qualitatively, or both. If the assessment is purely quantitative, then the individual may not need to be 'employed' but simply 'engaged' for some other form of remuneration, like commission.
In my opinion, a fixed sum of salary for the mandatory time spent on sales, along with a variable sum of incentives linked to the volume of sales achieved beyond a reasonable predetermined target, would be appropriate.
From India, Salem
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6108One of the basic ingredients of employment is the creation of the relationship between an employer and an employee, with the feature of regularity in hiring the time and services of the employee under the continuous control and effective supervision of the employer. Here, the mutual considerations are the performance by the employee and the payment of salary by the employer.
However, Sales as a Unique Job
Sales is a job in which performance depends on many factors such as the product or service, its price, offers to incentivize intermediaries, levels of market competition, changing consumption patterns, in addition to the hard work and salesmanship of the employee involved. Therefore, the time spent by the employee at the disposal of the employer or on the job cannot be completely ignored in determining their salary. Thus, the regularity and assurance of a fixed salary at the end of the wage period become indispensable, regardless of whether the employee's performance can be objectively assessed quantitatively, qualitatively, or both. If the assessment is purely quantitative, then the individual may not need to be 'employed' but simply 'engaged' for some other form of remuneration, like commission.
In my opinion, a fixed sum of salary for the mandatory time spent on sales, along with a variable sum of incentives linked to the volume of sales achieved beyond a reasonable predetermined target, would be appropriate.
From India, Salem
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Dear sir, Please have a look at the salary structure...and if possible let me know under which Act this kind of salary falls into..Even the ta/da is hourly based... Please help.. Regards,
From India, Kolkata
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From India, Kolkata
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There is nothing wrong with the salary structure as such; only they are asking to ensure you work a full 8.5 hours a day.
Minimum Wages and Payment of Wages Act
However, as per the Minimum Wages Act (and also in the new Code on Wages), the company has to ensure it pays the minimum salary specified for the location and work you are doing.
Further, the Payment of Wages Act (and Code on Wages) also states that in case the employer is not able to provide you work for the full day, you will be paid for the full day even if you work for less than the full day. However, if you have work and you do not do it, then the company is allowed to deduct salary for the period when you are not at the place of work (basically not doing work).
Salary Deductions and Fixed Salary
Another rule is that the total deduction from gross salary (including this particular deduction) cannot exceed 50% of the gross salary. Therefore, subject to these two restrictions, there is no rule that says you need to have a fixed salary.
Incidentally, you do have a fixed salary in your case. Only you need to work 8.5 hours a day for 26 days a month, which seems to be normal. Do you expect to be paid when you do not come to work, or did I miss something?
From India, Mumbai
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Minimum Wages and Payment of Wages Act
However, as per the Minimum Wages Act (and also in the new Code on Wages), the company has to ensure it pays the minimum salary specified for the location and work you are doing.
Further, the Payment of Wages Act (and Code on Wages) also states that in case the employer is not able to provide you work for the full day, you will be paid for the full day even if you work for less than the full day. However, if you have work and you do not do it, then the company is allowed to deduct salary for the period when you are not at the place of work (basically not doing work).
Salary Deductions and Fixed Salary
Another rule is that the total deduction from gross salary (including this particular deduction) cannot exceed 50% of the gross salary. Therefore, subject to these two restrictions, there is no rule that says you need to have a fixed salary.
Incidentally, you do have a fixed salary in your case. Only you need to work 8.5 hours a day for 26 days a month, which seems to be normal. Do you expect to be paid when you do not come to work, or did I miss something?
From India, Mumbai
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By any chance, if by "variable pay," you mean the entire pay, then it may not be workable. A salesman's pay packet generally keeps pace with market conditions, consisting of a fixed component aligned with market trends for his level of experience and capability, as well as retirals, and a variable incentive component to motivate him to push his potential further to achieve targeted sales. This aspect is well brought out by the learned colleagues, which can guide pay structure design for the sales staff.
Regards, Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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Regards, Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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If you see the salary structure, it is not variable pay as such. It talks of pay for working 8.5 hours a day and 26 days a month. To me, it seems to be a fixed pay. If you don't work all days or work less than a full day (assuming there is enough work), then obviously they will deduct LWP. The rest is on attaining certain targets. Allowances can be subject to targets, and there is nothing wrong with it. Any hardworking person will try to achieve their targets. Though the industry is not disclosed, the targets seem pretty fair if they are working in a 'market' location and will probably be a problem only if it's a rural area without enough customers to mine.
From India, Mumbai
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From India, Mumbai
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