Legal Question in Employment Law in Michigan

Withholding Commissions to pay company losses

My compensation package is 100% commissions. My company loans money to restaurants and if the restaurant defaults on the loan, my company charges me 15% of the company's loss. The way that they do this is by withholding around 10% of my earned commissions each pay period to cover their loss. This 15% represents an amount that is 5 times greater than my projected commission on that account.

Last year that amounted to more than $ 20,000 for me. Do you know if this is legal? This policy affects more than 100 sales reps around the country.

Your advice or opinion would be greatly appreciated.


Asked on 2/04/04, 7:27 pm

1 Answer from Attorneys
Janet Ziulkowski Ziulkowski & Associates, P.L.C.

Re: Withholding Commissions to pay company losses

It may not be. But before I can answer your question, I need more information. Is there a written commission agreement? Are the commissions withheld directly linked to the loans or are the withheld funds simply an aggregate of all the monies you earned on other sales? Are the commissions based on the sale of goods or services or a combination of both?

I know there are alot of questions, it may be better to come in and talk about this in greater detail. I provide free consultations and evaluations of cases. I can be reached at 586-979-7302 if you would like to come in and discuss this in further detail.

Janet Ziulkowski

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Answered on 2/04/04, 7:37 pm


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