Legal Question in Employment Law in California
Adjusting erroneous commissions paid
In error, two (2) salespeople were overpaid their monthly commission bonus the last three (3) months. The bonus structure is tiered, with the calculation being ''X'' amount for the first ''X'' amount number of items sold, and ''Y'' amount for any sales in addition to the base ''X'' number. These two amounts were reversed in error and although the salespeople receive a bonus breakdown, it was never caught, either by them or accounting until now.
We are proposing to deduct the 95% of amount paid in bonus erroneously over the next six months, deducting 5% as an offset. Can we legally do so? Is there a time frame as to when the error could have been caught and reversed (its 90 days).
Thank you.
1 Answer from Attorneys
Re: Adjusting erroneous commissions paid
There is a law that severely limits the right of an employer to deduct money from earned compensation without the employee's consent.
The best approach is to bring the matter to the attention of the affected employees and see if an acceptable arrangement can be worked out. If not, you should get legal assistance to make sure any deductions are done correctly.
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