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Charging Sales Employees for Administrative Cost??

YankYank 1 Post
in Compensation Vote Up0Vote Down
Three of my sales staff have formally written to object to this charging for phone, accounting and such. We have automatically deducted the expenses from commission checks. They are employees as well, we pay taxes on them and health benefits. Is this illegal?

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Comments

  • 3 Comments sorted by Votes Date Added
  • Theresa Gegen TXTheresa Gegen TX 814 Posts
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    From your question, I am not quite sure of what you are subtracting. If your commissions are paid based on sales price minus expenses, it is probably not illegal (Unless your state has some specific laws governing how commissions must be paid). However, it appears like your sales people did not expect to have the expenses deducted. Therefore, I am wondering if the company clearly explained how the commission was to be calculated to them.

    Of course, you must comply with any written agreeements or policies that you gave to the sales people about calculating commissions and the Fair Labor Standards Act (overtime and exemption laws). You might run into legal trouble there.

    Your company may want to consider changing its commission plan just to promote harmony with its employees. Three sales people sound like a lot of complaints. I would not be surprized if they got together to discuss the commission plan (if so, they were probably engaged in protected concerted activity and can't be disciplined for doing so).

    I suggest you run the specific plan by an attorney (because it is hard to say "no you're not in violation" with out all the facts). And perhaps seriously consider modifying the plan for company harmony.

    Good Luck!!
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  • JJJJ 32 Posts
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    I agree with Theresa's response. The only comment I have to add is that promises do not necessarily have to be "written" to constitute a contract. The company can be held to verbal promises if they can be proven to exist.
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  • CuriousGCuriousG 124 Posts
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    It would seem that if the commission is to be based upon 'sales price minus administrative expense' that this deduction should not even appear on the employee's commission check.

    I am not sure I understand what you are trying to accomplish with the deduction.
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