{"id":2418,"date":"2011-09-19T08:00:15","date_gmt":"2011-09-19T08:00:15","guid":{"rendered":"https:\/\/www.californialaborlaw.info\/?p=125"},"modified":"2011-09-19T08:00:15","modified_gmt":"2011-09-19T08:00:15","slug":"california-commission-chargebacks","status":"publish","type":"post","link":"https:\/\/www.california-labor-law-attorney.com\/california-commission-chargebacks\/","title":{"rendered":"Charge Backs for Commission Employees may not be Considered an Unlawful Deduction"},"content":{"rendered":"

\"Young<\/p>\n

The Holidays are over and now comes the time all sales people dread, the return season!<\/p>\n

Returns are inevitable, but how much can they take back from the commissions you already got paid?<\/p>\n

California Court of appeals has maintained that employers do<\/strong> have the right to take back previously issued commission wages. This practice is commonly referred to as \u201ccharge backs\u201d. In DeLeon v Verizon Wireless<\/a>, the courts view charge back as the return of an advance on wages. In others words, the original payment of commission was considered an advance on possible earned wages based on the sales the employee initiated. But if for some reason the sale was not completed, was cancelled or returned, the advanced commission could be returned to the company as a charge back or deduction of current commission wages.<\/p>\n

DeLeon was a little more complicated than this. Verizon held a period of 1 year from the original sale as the time in which they could issue a charge back. So Verizon was watching customer accounts a year after to see if the client returned the product or canceled the service. If the sale was revoked within that year, the sales person was issued a charge back and the money was returned to the company.<\/p>\n

When Considering DeLeon in conjunction with last month’s decision in Sciborski v Pacific Bell<\/a>, you may notice the courts will distinguish a legitimate contractual condition on earning a commission from an unlawful “deduction” or “withholding” of wages. Under the principles discussed in these two opinions it appears that courts will generally allow employers to deny a commission payment if an employee fails to fulfill a term that:<\/p>\n