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Ask Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Employment Law
Satisfied Customers: 41221
Experience:  I provide employment and discrimination law advice in my own practice.
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I work as a loan officer at a mortgage bank in CA. I believe

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I work as a loan officer at a mortgage bank in CA. I believe that I am not considered an "outside salesperson" based upon the definitions I've read on state government websites. I work 100% of the time at the employer's headquarters; I'm paid with a W2; I'm commissioned; I receive a recoverable draw. My question is: Is it lawful for my employer to deduct the cost of an appraisal that I ordered as part of the sales process/cycle if the loan is ont completed? The company policy is to not charge the customer the appraisal fee upfront, but only if the loan funds. If it doesn't fund my employer does not cover the cost; the cost is deducted from the loan officer's paycheck at a point in the future.

For example: I order an appraisal through our companies appraisal company and it comes back with a value too low to help the person refinance. They are underwater. We cannot consumate the loan at this point and go our separate ways. Sometime in the future I will have a deduction on my paycheck for the cost of the appraisal.

Is this legal?

Thank you!

Thank you for your question. Please permit me to assist you with your concerns.

To answer your question directly, you are essentially asking if the company can transfer such costs and expenses onto their employees. The answer is not favorable to you, so kindly do not blame the messenger--so long as the employer directly and expressly states that this is the policy of the employer, such a policy is legal. Many companies engage in what is very much a shady practice of holding their own employees responsible for costs that are not really associated with their work--companies can lawfully charge back refunds, hold parties such as yourself responsible for specific costs of appraisals or reports, and cover it only under specific conditions. That is permitted regardless of whether or not you are an independent contractor or an employee, provided the employer clearly delineated the policy, such a policy is lawful.

I am genuinely sorry.

Customer: replied 4 years ago.

One last question. You state "if it is the employers policy" - Must this be a written policy? For example, in my compensation plan there is nothing about this policy, neither is there anywhere in the employee handbook. Thank you.

Thank you for your follow-up.

The policy does not have to be written or pt into the employee handbook to be valid, the policy simply has to be directly communicated, known, and provided to the employees. In this case the fact that the policy was not printed can potentially permit you to claim that you weren't notified until the employer began withholding funds from your payment without consent (something that would violate state employment laws). But if you were informed, either by email or even orally, and this policy has been in existence for a while that you were exposed to, the fact you would remain working there gives credence to the policy. The potential 'out' I see for you is if you never signed any agreement or consented to any withholding directly--that would violate state law and would permit you to file a grievance against the employer with the state department of labor. The policy of withholding itself is not illegal, but withholding money without consent IS against state law, and I hope I was able to qualify the difference for you.

Good luck.

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