Legal Question in Employment Law in California

Payroll deductions (charge backs)

My employer deducts money each month form my check without my permission. I work as a finance manager for a new car dealer and if a car is repossesed I am charged back for my earned commission. If a customer pays off there loan early I am charged for the difference of reserve earned, even when I was not employed when the contract was originally sold to the bank. I am frustrated! This amount is in excess of 10k each year. The owner has told the office manager to not charge back my pay unless I have had a chance to review the charges and sign off on the deductions. The office manager has not once asked for my signature on charge backs or allowed me to see them before charging my checks. I asked her if repossesions arent ''cost of doing business'' and she replied ''well someone has to eat it''. I've spoke with others in my industry and after 3 months they are not charged anything for warranty cancellations or the like. I am desperate for some help.


Asked on 8/14/05, 10:22 pm

1 Answer from Attorneys
Patrick Turner Patrick E. Turner Inc. APLC

Re: Payroll deductions (charge backs)

Generally speaking, charge backs that you describe would be illegal. When a salesperson has been paid commission for a transaction, it is illegal for the employer to "chargeback" and recover portions of the money paid to an employee. Recently, however, there was a case involving newspaper telemarketers which created a narrow exception to the general "no chargeback" rule. You should promptly consult with an employee rights attorney in your area and have your commission plan reviewed.

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Answered on 8/31/05, 5:38 pm


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