Legal Question in Employment Law in Massachusetts

Deducting Customer Bad debt from pay

My former employer where I was employed as a Territory Rep (classified as an employee and NOT an independent contractor)with a W'2 and had payroll taxes etc deducted from pay. Anyway- this company would and still is deducting 25% of any unpaid customer invoices from my pay. I was not on salary but was paid commission and if quota met - I was paid a bonus. They would also deduct any commission previously given for the sale. I understand about them taking back commission - that's normal. But is it legal for them to also deduct 25% of the customers invoice as well? I was selling on behalf of the company to the customer as an exempt employee. Also- if the customer eventually DID pay their bill- the company would not reimburse to me either the commission OR the 25% of the invoice originally deducted from my paycheck. Doesn't this fall under a company's ''bad debt'' expense and is just a cost of doing business. Now they are coming after me for invoices owed and I don't even work there anymore - haven't since July12th.


Asked on 9/09/02, 12:14 pm

1 Answer from Attorneys
Nance Lyons Law Office of Nance Lyons

Re: Deducting Customer Bad debt from pay

Your compensation package should be in writing and should have been given to you by your employer. If it describes what they are doing and you accepted it, you could be bound by its terms. However, this may violate the law. I would call the Wage and Hour Administration at the MA Attorney General's office. If this is illegal they may be able to recover what has already been deducted. As to new claims the employer is asserting against you, let them sue you and prove that you own the money.

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Answered on 9/20/02, 2:36 pm


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