Collector - May 2018 - 29
policy so they understand your intentions
and explain how you will be tracking
"If you're not tracking it, the whole
thing falls apart," Barton said. "You go
from good intentions to having a problem
that might open you up to legal exposure
from an employment law standpoint. You
have to be careful."
Conklin said that in her previous
company, she and the in-house counsel
wrote the compliance violation policy and
included specific examples of violations
and related consequences.
"If collectors earned 100 percent on
their scorecards every month, they got an
extra $250 on their bonus check," she said.
"But if they failed a call, they'd lose $50 out
of that incentive. If they failed two calls,
they would lose the bonus all together.
And then if they failed three calls, their
commission check took a hit. So now not
only did they lose their bonus but it's out
of their commission check."
Conklin noted that this was in Ohio,
where state law allowed companies to
deduct from an employee's hourly rate as
long as it didn't go below minimum wage.
Before making changes to your
compensation and bonus plans, think
about any risks you may be introducing.
The Fair Labor Standards Act has
something to say about how bonuses
tied to productivity or profitability
are calculated, and some states have
restrictions on if and how employers
can take deductions from employees'
paychecks or reduce their rate of pay.
To be safe, consult with a human
resources professional or even an
employment law attorney to make sure
your compensation plan is compliant with
both federal and state labor laws.
The days of so-called "diva collectors"-
employees who are so talented they may
sometimes f lout company policy without
consequence-are over. Collection
agencies should expect uniform
compliance from each employee and treat
everyone the same when it comes time to
issue rewards or punishments.
"You may lose a collector, but you have
to set that tone," Conklin said, noting
that if companies are tying incentives into
compliance and "doing things the right
way to get those right behaviors, that top
collector will earn even more money if
they are compliant because you are giving
When violations do occur, take swift
action. Conklin described a situation that
arose at a previous employer when the
operations and compliance departments
were at odds as to how to implement the
company's compliance violation policy.
"The operations manager wanted to go
over any compliance violations or issues
that may have come up each Friday," she
recalled. "And we said that wasn't going to
be effective because you're allowing five
days for this behavior to continue. But the
operations manager won-the business
decided to give it a try. And what happened
was the collectors were coming back to us
and saying, 'You're going to fine me $75 for
these compliance violations, but you didn't
even tell me about the first one until I'd
done three of them!' It just didn't work out."
Compliance is truly a moving target
as state and federal laws and regulations
change on a weekly or even daily basis,
so be prepared to revisit your compliance
violation policies often, no matter the tone
change at the CFPB.
"The CFPB reviews bonus structures
to see that companies are doing more
than rewarding employees who make the
most money; it also wants companies to
incentivize compliant behavior through
negative consequences when employees
violate the law or company policies,"
Barton said. "This can come in the form or
withholding some or all of a bonus, suspension,
or even termination depending upon the
severity and/or number of violations. And
independent of what the CFPB wants, that's a
good way to run a business."
Anne Rosso May is editor of Collector
Despite the change in
tone at the CFPB, aligning
your compensation and
compliance strategies is
still critical as consumer
protection agencies and
state attorneys general are
not bound by changes in
should expect uniform
compliance from each
employee-the days of "diva
collectors" are over.
Before making changes
to your compensation
and bonus plans, make sure
you are in compliance with
state and federal labor laws.