Can an employer take part of an employee’s bonus?

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Can an employer take part of an employee’s bonus?

Inside Sales Rep paid Salary + commisions. Cash Incentives paid by third-party vendors. Incentives are paid through company pay roll Employer takes 20% off top.

Asked on October 19, 2010 under Employment Labor Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The incentive is paid by the third-party vendors? Then it's not necessarily subject to the wages and hours laws, which would limit the ability of your employer to take any. Probably the answer will turn on how the incentive is paid and structured. For example, if a vendor pays, say $1,000 to the employer, the employer doesn't actually have any obligation to turn any of it over to the employees. They could therefore put in place a program whereby they keep 20% and turn the other 80% over to the staff. If checks were made out to employees, but then sent to the attention or care of the employer, they could NOT cash them on your behalf (whether or not they intended to turn 100% over), but with payments made to the company, the company would have significant discretion on whether, how, and how much to turn over to its staff.


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