[Last One Mile Labor Union] "Commissions are lumped into bonuses once every 3 months," wage cost reduction plan by CEO Makoto Watanabe

For sales professionals, commission is not only a wage that supports their livelihood, but also compensation for their own achievements. It is necessary to clarify when and how much will be paid if the conditions set by the company are met, and to disburse it accurately.

In the labor and accounting training sessions of Last One Mile Inc., as reported to our union by current Last One Mile employees, Representative Director, Chairman, and CEO Makoto Watanabe presented a proposal to consolidate the monthly commission calculations into quarterly or semi-annual bonuses in order to reduce administrative burdens.

If calculating commissions every month is a hassle, do it once every 3 months

If HR is calculating commissions every time, we should eliminate the need to compile them at the work site each time by doing it once every three months or recording and summarizing them in the ledger.

It is certainly possible to newly design a commission system and establish it from the beginning as quarterly or semi-annual performance bonuses. However, deferring wages that have already been generated based on monthly sales or the number of contracts to several months later, simply because the company's calculation work is troublesome, is a different matter.

The company can reduce administrative work, but during that time, employees will not receive the compensation they have already earned through their labor.

The timing of wage payments cannot be decided solely based on the convenience of the accounting department.

If commissions constitute wages generated monthly as compensation for labor, in principle, they must be paid in full at least once a month on a designated date.

Simply changing the name to "bonus" does not automatically turn already accrued wages into a bonus. What matters is the actual system: under what conditions the amount is determined and when the right to claim payment arises.

If commissions that were previously confirmed every month are postponed by three or six months simply by changing the name of the system, this is not business efficiency, but could instead become a mechanism for the company to temporarily retain employee wages.

Rounding down is pocket change to the company.

During the training, a proposal was also discussed with the intent of rounding down small fractions of commissions to reduce the calculation burden.

Even if tens or hundreds of yen may seem like a fraction to the company, the total amount grows large when it applies to many employees and is repeated every month. Above all, since it is money earned by employees meeting conditions, it is not money that can be unilaterally erased just to reduce the company's administrative work.

If the system allows only the company to benefit from truncation, the question is raised whether this is actually rounding or a system of withholding a portion of wages.

An employee's life is not a quarterly financial result.

Business executives look at performance in quarterly, semi-annual, and annual units. However, employees' rent, mortgages, food costs, childcare fees, and utility bills occur every month.

Deferring commissions, which were paid based on monthly performance, to several months later is not merely a change in processing date. It has the same economic effect as having employees make an interest-free loan of funds to the company.

Public questions for Last One Mile, Inc.

1. Are there any systems where commissions that were previously paid monthly have been changed to be paid every 3 or 6 months?
2. Can you disclose the number of affected employees, total payout amount, and deferral period?
3. Before the change, how did you revise the employment regulations, wage regulations, and labor contracts?
4. Have you explained the reasons for the change and the details of the disadvantages to the employees or worker representatives?
5. Has a system for rounding down fractions of commissions been introduced?
6. Are you calculating the cumulative total of the truncated amounts?
7. Have you obtained an opinion from a labor and social security attorney or a lawyer regarding consistency with the principle of wage payment?

Do not delay salaries to make payroll easier

Commission calculation can be streamlined by introducing a payroll system, standardizing calculation formulas, adjusting closing dates, and utilizing automatic aggregation.

However, if the easiest approach chosen is to reduce the frequency of payments, eliminate fractions, and make employees wait, what is being cut is not merely administrative costs.

It is the amount employees receive and the time it takes to receive it.