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Overpayement and subsequent witholding of commissions California

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  • Overpayement and subsequent witholding of commissions California

    In Oct 2010 I was overpaid commissions of 23k. I did notice the error. But the EXACT(paid incorrectly twice on the same deal) same overpayment was made a few months earlier and shortly after corrected. I assumed the same would happen and went about my business. In Feb 2011 I recieved my W2 and saw that the overpayment was still on there. I then contacted accounting and advised them. They said they would get back to me and never did. I ended up paying taxes on the 23k. It is now almost July 2011 and they have been withholding my commissions earned since Oct of 2010 while they "figure out" how to fix the problem. I had offered to pay 25% of it back and then they could deduct 20% of commissions earned, but they have not responded. As of now they withheld a total of ~22k in commissions.

    I'm wondering if this is/was legal? Can they withhold ALL of my commission until I'm paid up? What recourse do I have?

  • #2
    Are you inside sales or outside sales?

    Comment


    • #3
      Please answer the prior question, because there is a really good reason it was asked. Past that issue, CA has a problem with employers recovering overpaid wages without going through the courts. The following is from the CA-DLSE manual.

      11.1.3 Deductions From Wages. The courts in California and the United States Supreme Court have held that deductions from wages in effect allow an employer a self-help remedy which is illegal. (Sniadach v. Family Finance, 395 U.S. 337 (1969). California law was changed in 1970 to conform to the holding in Sniadach. (See C.C.P. § 487.02(c)). See also Randone v. Appellate Department (1971) 5 Cal.3d 536 and CSEA v. State of California (1988) 198 Cal.App.3d 374; 243 Cal.Rptr. 602.

      11.2 Employer May Not Collect Or Receive Wages Paid Employee. Labor Code § 221 prohibits an employer from recovering wages paid. This provision prohibits an employer from receiving from an employee any wage paid by the employer to the employee either by deduction or recovery after payment of the wage: “It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee.”
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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      • #4
        I'm outside sales.

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        • #5
          Outside sales means no minimum wage or overtime requirements. Short answer is that the employer is technically violating the law I just cited by their actions. HOWEVER, if the employer takes you to court, they can likely successfuly win. The law I cited does not prevent the recovery of overpaid wages, but it does limit which actions the employer is allowed to take. There is nothing in the law that lets you keep overpaid wages.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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          • #6
            I offered a solution of paying 25% back right now and then paying back 20% of future commissions earned until paid off. But they said no.

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            • #7
              Das ist in der Doktor!

              Originally posted by golarge View Post
              I offered a solution of paying 25% back right now and then paying back 20% of future commissions earned until paid off. But they said no.
              They want it when they want it and how they want it,
              ...and you get no choice of a lubricant.

              .._________________
              ~ Meddle not in the affairs of dragons
              ...for thou art crunchy and taste good with ketchup

              Comment


              • #8
                Were you paid that way when you got the extra money? They have no obligation to set up a payment plan.

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                • #9
                  Well, I'm certainly getting some conflicting information...

                  I was told by a friend who is a CPA and VP of Finance that in CA, commissions are considered wages and cannot be unilaterally deducted or withheld under any circumstance, except the following:

                  (1) When required or empowered to do so by state or federal law, or
                  (2) When a deduction is expressly authorized in writing by the employee to cover insurance premiums, benefit plan contributions or other deductions not amounting to a rebate on the employee’s wages, or
                  (3) When a deduction to cover health, welfare, or pension contributions is expressly authorized by a wage or collective bargaining agreement. Labor Code Sections 221 and 224.

                  Comment


                  • #10
                    However, they can take you to court to recover the money as noted in the
                    posts above.
                    Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

                    Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

                    Comment


                    • #11
                      You can file a complaint with the DLSE:

                      http://www.dir.ca.gov/dlse/dlseWagesAndHours.html

                      Comment

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