Can a referral agency deduct any earned wages if my invoice is ‘late’ (even though it is submitted in a timely manner)?

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Can a referral agency deduct any earned wages if my invoice is ‘late’ (even though it is submitted in a timely manner)?

I do contract work, often billing through an agency. One agency has recently demanded that my invoice be submitted to them within 35 days of doing the job- otherwise there will be a 10% deduction from my earned wages (they do NOT take out taxes, etc) as a penalty. My argument that it is to their advantage if I bill late- they earn the interest on my money in their account. Their view is that it makes their accounting ‘messy’. What are the legalities regarding ‘pay penalties”?

Asked on May 16, 2009 under Employment Labor Law, Maryland

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

This doesn't sound right -- how can you invoice late if submitted in a timely manner.  If you are required to bill within 35 days, I don't see a problem.  What does your contract say? Is this in the contract?
Not sure what you do but essentially if you bill late, they get paid late, too.  I am assuming a consumer pays? So, I don't really see a problem seeing as how you are probably a 1099 contractor. 

If you wish to verify this provision, contact the Maryland Dept of Labor.  The agency should be able to point you to any specific provisions if counter to what I wrote above. http://www.dllr.state.md.us/


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