Commission Charge-Backs

[beeasyonme]

I work in Michigan at an auto dealership in the Finance department. I am constantly getting charged back commissions previously earned for early loan payoffs, service plan cancellations, insurance cancellations, etc. My question is: can my employer do this to me without my written consent? I don't recall signing anything saying it was OK for them to take charge-backs out of my pay, and it does not state anything in the employee handbook about charge-backs at all.

Charge-backs are very common in the auto industry - it happens everyday. But I'm wondering if the dealership owner needs my written consent before deducting my pay.

Thanks.

[Pattymd]

They are not "deducting" from your pay (which is an amount taken from your net pay), they are "reducing" your gross pay. The reason I make that distinction is that there are prohibitions in certain states as to what type of deductions can legally be made, with or without your authorization.

However, if your commissions can be reduced by charge-backs according to your commission agreement, then this is most likely legal, as long as you receive at least minimum wage for the hours you have worked (if you are a nonexempt employee) or your weekly salary of $455 (if you are an exempt employee).

[beeasyonme]

Thanks for responding.

And you are correct, they do reduce my gross pay.

But, can they reduce my gross pay with these charge-backs without my written permission or if there's nothing in my commission agreement that mentions anything about charge-backs?

[Pattymd]

Yes, they probably can. Not everything has to be in the agreement. There's also an old HR line about "practice makes policy".