Legal Question in Business Law in Virginia

Re: employer taking 5% of sales to pay for business credit card use

Well, first, like most of such questions, it

might not help you very much to know the answer.

Unless you are ready to find another job, you

would not be able to make an issue out of it

without jeopardizing your job.

Second, the idea of "legal" has different

meanings. I don't believe it is "illegal" in the

sense of being forbidden by law. On the other

hand, if I sign a contract to pay a worker

$5,000 to do a project, and I only pay them

$4,000, this is not "legal" -- that is, it is

breach of contract and under the law they can

sue me for the remaining $1,000. So it is not

"legal" but it is not forbidden as a criminal or

regulatory manner.

If your employer promised to pay you $X but

instead pays you only 95% of $X, then the

employer is breaching the contract, exactly the

same as if I paid a consultant $4,000 after

promising to pay them $5,000.

However, had the employees actually AGREED to

such an arrangements (I know they did not), it

would be "legal" to do this, if everyone agreed.

For example, an employer could say that they

wanted to encourage employees to take payment

by some other means, discouraging credit card payments and sales.

Third, however, the credit card processing

companies have very strict rules about NOT

discouraging credit card use. The employer's

actions may be a violation of the very strict

and very comprehensive rules for merchant credit

card accounts.

Fourth, I am quite certain that your employer

is NOT paying 5% for credit card processing

services, because I am just pricing them now,

and they are around 2.29% plus a transactional

fee of between .25 and .35 cents per transaction.

So if your employer is paying 5%, she needs to

do some research and get a much better deal.

Take a look at "Fast Transact" or "Affiniscape."

Perhaps you could show your employer that it is

possible to get such services for around 2.29%,

and (even if she knows this) that might force

some improvement.