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If an auto sales company fails to meet their quota, can they penalize employees? A deduction of 1500 was deducted from employees paychecks because they company Ed Hicks Infiniti failed to meet their quota. Is this legal????
Asked on January 4, 2017 under Employment Labor Law, Texas
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 4 years ago | Contributor
It is legal only if agreed to by the employees. Agreement could be implied, so that if employees had been told in advance (e.g. in a policy handbook) that there was a penalty for not making quotas and the employees continued to work there after receiving notice of the policy, that (continuing to work) would show acceptance or agreement to the policy. Or agreement could be explicit, as in if there was a written commission agreement with this term. But in one way or another, there must be agreement; without agreement, it is illegal, and the employees could contact the state department of labor to file a wage and hour complaint, and/or sue, such as in small claims court, for the money.
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