What can I do if I have encountered a situation in which my employer is attempting to charge back my commission for sales dating back almost a year?

UPDATED: Sep 29, 2022

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What can I do if I have encountered a situation in which my employer is attempting to charge back my commission for sales dating back almost a year?

I’m employed in a sales position and receive a weekly salary, commission on personal sales, and bonus. The company has no written chargeback policy and pays commission along with salary wages bi-weekly for the previous period. All sales people complete their own commission earning statement and submitt them to the payroll administrator for approval. My employer now feels that the sales team was over compensated on certain deal, even though they paid commissions on those deals and were approved by the payroll administrator. Is this legal?

Asked on November 13, 2015 under Employment Labor Law, Massachusetts


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

IF you were overcompensated under the terms of your commission, then they are entitled to get the money back--mistakenly approving overpayment does not prevent the company from recovering the overpayment, or entitle you to the money. So, for example, if you were commissioned at too high a rate; or if they forgot to take out certain discounts, allowances, or credits, etc. before calculating your commission; or you were supposed to split you commission with other persons; etc.--if there there any reason you simply were paid more than you should have been paid--they are entitled to the money back. They would not be entitled to it if you were paid the proper amount under the commission plan in place at the time, but the company has not rethought or changed that plan--they may not alter the terms of your compensation retroactively.

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