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Can my Employer Deduct Expenses From my Commissions?

For employees paid an hourly wage or salary, the law is relatively clear- the employer cannot deduct from your paycheck costs that should be borne by the employer.  Put another way, the only lawful deductions are taxes, garnishments, deductions to pay for things that benefit the employee (i.e., health insurance), and in some circumstances deductions the employee has agreed to.

Some commission policies, however, include in their calculation an offset for costs that would not be deductible from an employees salary or hourly wage.  For example, a deduction for the cost of product for hair stylists.

The law in Massachusetts is not settled on this question.  Employers argue that they have a right to set the amount of commissions and include these deductions as part of the calculation.  There is, however, a compelling argument that has been entertained by the court at the trial level that this is no different that unlawfully spreading the employer's operating cost to the employees.

The correct answer may vary from situation to situation, and depend in part on how the commission policy is drafted.  If you have questions about deductions from your commission pay, you should consult an employment lawyer and get an individualized assessment.


Learn more here about commission pay under the Massachusetts Wage Act.

Need Help With a Commission Payment Issue?

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  • Home
  • Employment Law
    • Guide To Employment Law Content
    • Employment Contracts in Massachusetts
    • Discrimination in the Workplace
    • Employment Termination >
      • Massachusetts Paid Family Leave
      • Severance Pay
      • Unemployment in Massachusetts
    • Sexual Harassment at Work >
      • Sexual Harassment in a Small Business
      • Sexual Harassment and Non Disclosure Agreements
      • Sexual Harassment and Remote Work
    • Wage and Hour Laws >
      • Overtime Law >
        • Overtime Exemptions
        • Employee Travel Time
        • Federal or State Overtime Law
      • Massachusetts Wage Act >
        • Payment of Commissions
        • Wage Deductions
        • Late Payment of Wages
        • Paid Time Off
    • Independent Contractor Law
    • Non Compete Agreements >
      • Are non competes enforceable
      • Massachusetts Non Compete Act
      • Pre 2018 Massachusetts Non Competes
  • Estate Planning
    • Guide To Estate Planning Content
    • Legacy Protection
    • Why You Need an Estate Plan
    • Why You Don't Have an Estate Plan
    • Estate Planning Documents >
      • Children with Special Needs
    • Planning for Assisted Living
    • Probate Process
  • Business Law
    • Guide To Business Law Content
    • Small Business Law
    • Business Contract Basics
    • Civil Suit Defense
    • Legal Issues for Start Ups
    • Trademark Basics
    • How to Incorporate
    • Sale of Business
  • About
    • Reviews
    • Slnlaw Offices
    • slnlaw core values
    • Publications and Interviews
    • New Client Intake and Consultation
    • Contact
  • Attorneys
    • Emily Smith-Lee >
      • 2018 Lawyer of the Year
    • Jenna Ordway
    • Rebecca Rogers
    • Sharleen Tinnin
    • Elijah Bresley
  • Legal FAQs
    • Estate Planning FAQs
    • Probate FAQs
    • Small Business FAQs
    • Wage Act FAQs
    • Commission Pay FAQs
    • Overtime FAQs
    • Independent Contractor FAQs
    • Non Compete FAQs
    • Employment Discrimination FAQs
    • Employment Termination FAQs
    • Massachusettts Unemployment FAQs
    • Severance Package FAQs
    • Medical Leave FAQs
    • Sexual Harassment FAQs
    • Employer FAQs
    • Civil Lawsuit FAQs
  • Blog