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  #1 (permalink)  
Old 06-02-2007, 06:45 PM
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Join Date: Jun 2007
Posts: 2
Default Employer keeping pay- says I owe him money

I am paid a minimum base pay or commission, whichever is greater (bi-weekly). This was a verbal agreement between myself & my employer when I was hired. Now my employer is stating the base pays were actually Draws & that I owe him over $50,000.
At no time did we discuss the base pay being Draws, nor would I ever agree to that. There is no written contract stating the base pays were Draws or that I had to pay those back. Nor has my employer tried to collect on those base pays before now (after two years of paying base pays)).
My employer sent a spreadsheet to me this past Thursday showing the base pays as Draws, & he applied my current paycheck to the total "Draw" amount, meaning I am not getting paid this week. In fact, it means he will not pay me until he collects another $49,000.
I called my state Department of Labor. The advisor I spoke to said I need to fight this is in the civil courts. She stated if the base pay was an advance towards my commission (draw), my employer would have had to tell me. She also wanted to know why my employer would let it go for almost two years (if collecting on the base pays is what he really intended). She stated draws usually get drawn in the pay period, not two years down the road.
I need to know what is the best course of action, & the quickest course. My employer owes me close to $20,000 (yesterday's paycheck which I did not receive, and unpaid commission on jobs I sold).
Thank you for taking the time to read and respond.
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  #2 (permalink)  
Old 06-02-2007, 09:42 PM
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Join Date: Nov 2006
Posts: 456
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Quote:
Originally Posted by valhalla View Post
I am paid a minimum base pay or commission, whichever is greater (bi-weekly). This was a verbal agreement between myself & my employer when I was hired. Now my employer is stating the base pays were actually Draws & that I owe him over $50,000.
At no time did we discuss the base pay being Draws, nor would I ever agree to that. There is no written contract stating the base pays were Draws or that I had to pay those back. Nor has my employer tried to collect on those base pays before now (after two years of paying base pays)).
My employer sent a spreadsheet to me this past Thursday showing the base pays as Draws, & he applied my current paycheck to the total "Draw" amount, meaning I am not getting paid this week. In fact, it means he will not pay me until he collects another $49,000.
I called my state Department of Labor. The advisor I spoke to said I need to fight this is in the civil courts. She stated if the base pay was an advance towards my commission (draw), my employer would have had to tell me. She also wanted to know why my employer would let it go for almost two years (if collecting on the base pays is what he really intended). She stated draws usually get drawn in the pay period, not two years down the road.
I need to know what is the best course of action, & the quickest course. My employer owes me close to $20,000 (yesterday's paycheck which I did not receive, and unpaid commission on jobs I sold).
Thank you for taking the time to read and respond.
It sounds like you've already received an excellent suggestion, based on what you've posted. Before you schedule an appointment to consult with a good employment attorney in your area, be sure to collect as many paycheck stubs as you possibly can. It's important that you examine them to determine your type of base pay, be it salaried, hourly, draw or commissioned, etc., as all paystubs have one sort (or another) of base pay clearly labelled. As long as NONE of them clearly state "draw," you can at least begin to proceed. Any good employment attorney familiar with your state labor laws can let you know in your initial consultation what the best course of action may be. (Unfortunately, it might not be the quickest one.) Hopefully, he/she may also be able to get a copy of your original terms of hire .. I'd be curious to see if your employer still has a counter-signed original.

Short of that, I can only ask if your company has a national or regional corporate headquarters that you can possibly go to for help. (If that's available, I'd strongly suggest any corresondence between you be done in writing and that you retain copies.) If that's not the case, only you can decide whether or not to remain at your job under those circumstances. Unless your state will allow you to file a complaint to your Labor Board, your best bet is to consult with an attorney. (My opinion.)

Intriguing post. Please let us know how it turns out for you. Good luck.
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  #3 (permalink)  
Old 06-02-2007, 11:46 PM
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Thank you for your quick response. I can tell you that none of my paystubs say "Draw." They all say "Salary." This company is a small business, with less than 15 employees. After receiving the e-mail (with the spreadsheet), I spoke with my employer about it. (I asked the Office Manager to sit in on the discussion so I would have a witness to the conversation. While the Office Manager was not present when I was hired and when we agreed upon my pay, he is well aware of my pay arrangement and does not understand how our employer can even think to get away with this). I asked my employer to show me anything in writing where we even discussed the base pays being draws. He could not do so. We debated the issue with no resolution.

Following my conversation with my employer, I realized I had no choice but to resign. I need a job where I will get paid for work, and yet my employer expected me to work without pay until he collected $50,000 from me (6-10 months).

The Department of Labor told me I would need to go to the civil courts to try and get my $20,000 in payroll, because they only assist in cases involving less than $2,500.
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  #4 (permalink)  
Old 06-03-2007, 08:19 AM
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Join Date: Nov 2006
Posts: 456
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Quote:
Originally Posted by valhalla View Post
Thank you for your quick response. I can tell you that none of my paystubs say "Draw." They all say "Salary." This company is a small business, with less than 15 employees. After receiving the e-mail (with the spreadsheet), I spoke with my employer about it. (I asked the Office Manager to sit in on the discussion so I would have a witness to the conversation. While the Office Manager was not present when I was hired and when we agreed upon my pay, he is well aware of my pay arrangement and does not understand how our employer can even think to get away with this). I asked my employer to show me anything in writing where we even discussed the base pays being draws. He could not do so. We debated the issue with no resolution.

Following my conversation with my employer, I realized I had no choice but to resign. I need a job where I will get paid for work, and yet my employer expected me to work without pay until he collected $50,000 from me (6-10 months).

The Department of Labor told me I would need to go to the civil courts to try and get my $20,000 in payroll, because they only assist in cases involving less than $2,500.
Do you recall if you signed an employment agreement or contract that laid out the terms of your salary at the time you were hired? Typically, there are no real laws regarding commissioned income (that may differ in your state,) but unless there was clear language somewhere in your hire paperwork that stated the pay plan was subject to change with/without notification by the employer, he cannot withhold your past earnings. This is typically .. the laws of your state may read differently. That's also under the assumption no prior wage assignment, such as child support arrearage, state or federal tax liens (for example,) was already in place. Even then, the employer isn't entitled to that money. All of these factors can be discussed with your attorney.

A thought to keep in the back of your mind: It's highly suspicious that your earnings are being withheld under such unusual circumstances. I can only suggest you keep this in the back of your mind while you pursue your action: if an employer can't (or won't) pay your wages on time, it may well be because he simply doesn't have it for any one of a number of reasons. While you may end up prevailing in the end, collecting your back wages may be a problem. (MAY or may not.) This isn't being said to dissuade you from proceeding ... just understand there are no absolute guarantees you'll collect in the end. Hopefully, the office manager you mentioned above is willing to assist you (or at the very least provide a notarized statement now,) .. that should at least strengthen your side. Again, this is an opinion and not to be construed as legal advice.

And again, good luck to you.
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  #5 (permalink)  
Old 10-01-2008, 05:54 PM
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Join Date: Aug 2008
Posts: 225
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On the other hand, your company can't afford to treat employees it would like to keep in this manner. Thus you should assume they want you to resign. Moreover, it would appear that you could collect at least HALF of the money owed you by going to small claims court. I would consider that avenue unless you would rather go into court with a lawyer on contingency with a 30-40% loss of your income anyway. Time is of the essence. Go to small claims court with your income documents and show the judge what your company is trying to do.

I'd bet that they don't want to fire you because you could collect unemployment. Seems your company is probably in the red.

Also seems to be a pitifully ugly way for the owner to try to solve his problems. Lacks ethics.

OBTW. I believe you can contact the state about salary not paid. There is a limited time between work and payment... sounds like he is just about to break THAT barrier. What state are you employed in?

I just noticed how old this is. If you didn't get your pay, you can still go to small claims court. Do it.
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