Employee Charge Back Lawyers

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What is Employee Charge Back?

An employee charge back is a practice that usually occurs within sales industries.  An employee earns either a commission or bonus on made sales that have yet to be finalized.  Due to varying circumstances (i.e. sales numbers are lower than expected, or a majority of sales are returned or cancelled), an employer may choose to offset their losses by taking back any excess commission given to a sales employee.  This is an employee charge back.

Can an Employer Legally Do a Charge Back?

Most courts agree that employee charge backs are legal so long as it is indicated in the employment contract between the employee and the employer.  If the employer fails to state any desire to charge back in the contract, courts generally assume that an employee is entitled to keep the extra commission.  There are number of reasons why courts do this:

However, despite this general assumption favoring employees, an employer may still be able to charge back under certain circumstances:

How Can an Attorney Help Me?

Due to the importance placed on textual interpretation, it is best to consult an experienced contracts attorney to determine whether or not an employment contract includes an Employee Charge Back clause.  An attorney should be able to determine not only whether a charge back clause in an employment contract exists, but also whether a court can imply one based on the circumstances of any individual case.

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Last Modified: 02-13-2017 05:11 PM PST

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