Is a commissioned employee responsible for profit and loss of a business?

UPDATED: Sep 30, 2022

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Is a commissioned employee responsible for profit and loss of a business?

I am a commissioned employee. I work as a
massage therapist for an upscale spa in
Houston Texas. A client complained about the
facilities and the client received a 20 discount
off the services I provided. I was told that it
would be deducted from my pay. This is
happening a lot with my coworkers too. People
are performing massages and body treatments
and not being paid at all sometimes. I was
under the impression that this only happens
when you are contract labor. We are definitely
employees. We have job descriptions and
definite times we are supposed to be at work.

Asked on February 21, 2017 under Employment Labor Law, Texas


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

A commission can be reduced to reflect a discount given to customers, but the reduction is essentially calculated applying the commission to new, discounted price. Example: say you get 50% of the price of the massage, the other 50% going to the spa. If the customer gets a 20% discount, the spa can't take the whole amount from your pay. Rather, you would now get 50% of the reduced cost, or 50% of the 80% the customer is paying: in this scenario, since you are  at a 50% commission rate, you effectively "eat" half the discount, or 10%, while the spa absorbs the other half.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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