The way fees are being deducted from the gross sale before your commission is calculated would be considered legal so long as your employer classifies you properly (as an employee–which means they’re also deducting and paying employment taxes) and they’re meeting or exceeding the prevailing minimum wage in your area. If they are doing neither, the problem isn’t necessarily the costs they account for before calculating your pay, but the fact that they’re not in compliance with prevailing wage legislation and are therefore committing wage theft. Often, when I see that someone is “on commission,” that’s code for “commission-only,” which isn’t legal.

Hey Monica! That’s probably because the state of Montana doesn’t restrict or prohibit wage deductions. (Or at least it didn’t when I last updated this post.) It appears to now, so I’ve updated the post with the link. Here it is.

Cool. Here’s what the Texas Workforce Commission website says:

Deductions from Wages
To understand what wages are due and unpaid requires knowing what deductions are allowable. Employers must get proper written authorization before making a payroll deduction.

If an employee has quit while in possession of company property and is due a final paycheck, wages may be withheld only when the employer is authorized to do so by law, required to do so by a court or has written authorization from the employee for the deduction. Otherwise, the employer would need to attempt to recoup the property by some other means, such as civil remedies (e.g., lawsuit, small claims court or police report) or make arrangements with the employee outside of a wage deduction.

That’s what I meant by “restricted.” But again–irrelevant.

Also–NONE of what you copied and pasted reads as “arbitrary” to me, so I’m not sure how I was “wrong” in my assessment that arbitrary deductions are unlawful. Where’s your Law Degree™? Despite your “Texas” heading, you’re quoting federal law that pertains to specific classes of employees who receive things like board, lodging, and “other facilities” from their employers that may be considered income. I don’t have a fancy law degree, but I did pass my Enrolled Agent exam, so I know enough to know that this legislation has less than nothing to do with what we’re talking about. It’s neat that you thought I’d be dumb enough to mistake this for something legitimate and relevant though. You may want to continue reading that statute, specifically the part where it states:

“(c) It should also be noted that under §531.3(d)(1), the cost of furnishing “facilities” which are primarily for the benefit or convenience of the employer will not be recognized as reasonable and may not therefore be included in computing wages.”

I’d continue to share more about how “facilities” are defined in 531, but I’ll let you do that here. I’ve lost interest.

Oh, I see. You left a bunch of uninformed, catty comments under a fake email address without comprehending how comment moderation systems work and then got pissy when you didn’t immediately see your comments. LOL, cool.

You should re-read that post there, bud. I never said it was “illegal.” If you refer back to what I wrote, it says, “I have composed a list of states that restrict or outright prohibit arbitrary wage deductions below and linked the relevant statues.”

If you search the page for “Texas” you’ll see there are already some comments about the issue there and how they handle it, but that’s all irrelevant because you apparently didn’t read or understand the first part of the article to begin with, which states, ““Is it legal for my boss to take product fees from my paycheck? In the vast majority of states, arbitrary deductions from paychecks (even if you’ve authorized them by written agreement) are NOT permissible.”

You’re talking about a legal compensation structure that takes COGS from the gross sale–not from the employee’s wages. You don’t need a “Law Degree” to understand the difference.

I’m almost 100% sure this is spam, but because it’s a new variety of spam I’ve never encountered before, I’ll play along.

Lulwut?

In all the years I’ve been writing this blog, I don’t think I’ve ever deleted a post. I’ve certainly edited a few articles once circumstances or my opinions have changed, but I don’t remove the prior content. I strike it through and write [UPDATE-2019] etc.

Deleting posts on a site like this doesn’t benefit me whatsoever (because SEO). That said, the hyperlink structures have changed, so some links may lead to broken pages. That doesn’t mean the content doesn’t exist, just that it’s not wherever that link points anymore.

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(a) Section 3(m) directs the Administrator to determine “the reasonable cost * * * to the employer of furnishing * * * facilities” to the employee, and in addition it authorizes him to determine “the fair value” of such facilities for defined classes of employees and in defined areas, which may be used in lieu of the actual measure of the cost of such facilities in ascertaining the “wages” paid to any employee. Subpart B contains three methods whereby an employer may ascertain whether any furnished facilities are a part of “wages” within the meaning of section 3(m): (1) An employer may calculate the “reasonable cost” of facilities in accordance with the requirements set forth in §531.3; (2) an employer may request that a determination of “reasonable cost” be made, including a determination having particular application; and (3) an employer may request that a determination of “fair value” of the furnished facilities be made to be used in lieu of the actual measure of the cost of the furnished facilities in assessing the “wages” paid to an employee.
(b) “Reasonable cost,” as determined in §531.3 “does not include a profit to the employer or to any affiliated person.” Although the question of affiliation is one of fact, where any of the following persons operate company stores or commissaries or furnish lodging or other facilities they will normally be deemed “affiliated persons” within the meaning of the regulations: (1) A spouse, child, parent, or other close relative of the employer; (2) a partner, officer, or employee in the employer company or firm; (3) a parent, subsidiary, or otherwise closely connected corporation; and (4) an agent of the employer.