Can an employer deduct from an independent contractor’s commission penalties for paperwork errors?
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Can an employer deduct from an independent contractor’s commission penalties for paperwork errors?
Amount seems to be random.
Asked on February 23, 2011 under Employment Labor Law, Washington
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
If the contractor is truly an independent contractor (see below), then the relationship between him and her and the company is governed by contract. If the contract provides for such deductions, they are legal; if the contract does not allow for them, then the company may not take them, at least not for work done to date--in the future, if the agreement is renegotiated, such a term could be made part of it.
Note that if the "contractor" is actually an employee, then in almost all cases, deductions from pay like this are not allowed. If the contractor thinks he or she might actually be an employee or wants to check the rules for when someone is an employee, the department of labor (DOL) website will provide information about how to classify workers.
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