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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 5 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.

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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