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Are negative commissions illegal? Minnesota

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  • Are negative commissions illegal? Minnesota

    I am a Business Development Manager. I sell a service. I bring in business to my company by selling training courses. On my commission statement, my employer will deduct all fixed costs including use of computers, use of our training room, cost of employee trainers (even if they are bench consultants), electricity. If it nets positive I get 8% commission. If it nets negative after all this, he charges me 8% and deducts from my base pay. Is this even legal?!!!! Let me know if you need more details.

  • #2
    Let's start at the very beginning. Most employees under federal law (FLSA) must be paid at least minimum wage for all hours worked, and must be paid overtime for hours worked past 40 in the workweek. There are exceptions to these basic principals, maybe 100 or so actually, but each of these exceptions has rules associated with them.

    Exactly how do you sell what you sell? Do you physically knock on doors? Telephone sells? Internet sells? Exactly where are you selling from?

    And there really is a reason I need to know these things.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Thank you for your response. I sell to an existing client base and develop new business through cold calls/e-mails and student referrals and through the software company whose training we deliver on. We are an authorized training partner of the software. Companies send their students to my facility to take training courses. It is my job to fill the seats, procure enrollments.

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      • #4
        Interesting, although you might notice that you mostly avoided answering answering my questions. Let's try one more time. Where are you physically when you are selling things? In an office? Out in the field? At home?
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          I am in an office when I sell. I sell training courses.

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          • #6
            In an office means that the Outside Sales exception is removed from consideration. That means that:
            - You must be paid minimum wage.
            - You probably must be paid overtime (if applicable).
            - A possible argument could be made that you qualify for the Retail/Service Establishment exception. If this is true, then the overtime rules are functionally altered. But only if your employer actually qualifies for this exception, and if they also follow all related rules. This is not a freebie that makes overtime magically go away. It is a something for something trade off, if applicable.
            - Both minimum wage and overtime are a function of the workweek, meaning for each workweek, you are either paid at least minimum wage (or not) and you are correctly paid overtime (or not).
            - If these rules are followed, then federal DOL completely loses interest in your situation. If these rules are not followed, then you can file a wage claim with federal DOL.
            - If you are looking for more money then MW/OT, then it is a function of the exact wording of any compensation agreements (which I have not read) and related MN law, which I do not know (not my state).
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

            Comment

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