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I am a sales director with a bonus structure. Is it legal…

I am a sales...

I am a sales director with a bonus structure. Is it legal for a company to deduct 36,000 in sales from a previous year in my current year sales?

Lawyer's Assistant: What state are you in? It matters because laws vary by location.

I am inTexas but employer is in MN.

Lawyer's Assistant: Has anything been filed or reported?

No. I just received the reporting for Q1 which is showing no bonus. Had the 36k been in the sales I would have received a bonus.

Lawyer's Assistant: Anything else you want the lawyer to know before I connect you?

Um. Maybe. Let me think how to word this. I work for a very large public company.

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Answered in 2 minutes by:
3/12/2018
Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 20,566
Experience: Employment/Labor Law Litigation
Verified

Thank you for trusting your question to JA today. I am a licensed attorney with over a decade of law practice and over 20 years of experience in the legal field. I’m happy to be of assistance. (The system will automatically generate a phone call request to you. Unless I specifically state, during our discussion, that a phone call is possible, I intend to just use this chat format as I am not in a position to accept a phone call).

What was their basis for subtracting out the sales?

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Customer reply replied 4 months ago
The product was defective so my company decided to take it back. Management made a decision to not issue the credit until the beginning of our new fiscal year. I was not with the company when this material was purchased nor was I the one who agreed to return it.

I am not offering a phone call. That is automated and I will not accept a phone call request.

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Customer reply replied 4 months ago
Okay. Can we continue with this.
Customer reply replied 4 months ago
Hello?

Yes, I'm typing a response. It will take a second.

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Customer reply replied 4 months ago
Sorry.

Nothing to apologize about.

When you are talking about bonuses, the employer has a lot of leeway with how they set them up. However, when it is part of your payment structure, the employer isn't entirely in control.

Unless the policy was very clear that prior year sales returns could be counted against present year sales bonuses, then the employer's lack of clarity on the issue would be held against the employer. The point is that an employer can set up their pay systems pretty much however they wish, but the employee has to be on notice so that they can intelligently decide if they want to work under that system or not.

In this instance, I think you have a reasonable basis to file a wage claim with your state's Department of Labor, a protected activity so the employer cannot legally retaliate against you for doing so. This allows you to have a third party investigate and enforce the ruling.

You would use Texas, because that is where you work. When the employer pays you, they subject themselves to Texas jurisdiction, so that is why you can file in the Texas Workforce Commission.

If you have any further questions or other facts that you would like me to consider, please let me know. I invite follow up questions, so use REPLY for those. If you have no further questions then good luck going forward and please do not forget to rate my service with a three, a four or preferably a five star rating so that I receive credit for working with you today. Please rate me based on my service and not on your satisfaction with the law, which I am not in control of and I am just reporting to you. Please DON’T rate my service until after you have asked any follow up questions that you have, so that I have the best opportunity to earn all 5 stars. Also, feel free to request me in the future, if you have questions concerning a different matter.

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Customer reply replied 4 months ago
It’s $13,000. In addition they are also using the most expensive Freight to deliver our materials instead of getting competitive rates. This also factors into our commission.

On the issue of using the most expensive freight, unless they agreed to seek competitive rates, I don't think you have an argument there. I do think you have an argument about applying the prior year sales returns to this year's bonus structure.

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Customer reply replied 4 months ago
Okay. Some of my sales reps were penalized with over 100k in sales credits that were in 2017.

That is fairly significant. The TWC may review them or may decide this is too complicated for them, which may require hiring local counsel. It would still be a protected activity, but you may consider pooling together if that becomes what you have to do.

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Customer reply replied 4 months ago
They have gotten into issues in the past with this. Thank you!

No problem. Take care and good luck going forward.

Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 20,566
Experience: Employment/Labor Law Litigation
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