Can a prior employer deduct beyond commission when a customer goes bankrupt?

This is one where you are going to need an employment lawyer. No one here is capable of giving legal advice, and even if they were, you will be ill-advised to follow the advice of some anonymous goofs.

^ What @elbanditoroso said, and we don’t often agree, so that in itself ought to tell you something.

First off, I am not an attorney, but I do have experience in employee relations and finance. (I was a CFO for 19 years in North Carollna);

Generally, as an employee you are not responsible for the financial solvency of your employer’s customer.

An employment lawyer is a good idea, however as a resident of California your best bet initially is the California Department of Labor (it might be named something slightly different)
Employment law in California is structured to favor employees more so than in most other states.

I had two experiences with disputes with salespeople in California and both were resolved by the Department of Labor in favor of the former employee. (One was a prima facie case of defrauding us but we lost any way. On the other hand I had a free weekend in San Francisco on the company)

Seriously make an inquiry at the Department of Labor before you get an attorney involved with this. They will work with you to determine your rights and stand behind you if you file a complaint.

SRM

@cjincerritos Welcome to Fluther. May your stay here be long & enjoyable.

I second what @srmorgan recommends. Start with Cali’s Department of Labor. If you would end up needing to consult an attorney, perhaps they would point you towards the best attorney for you to consult.

I agree with contacting the dept of labor as a starting place.

I have no idea what the law is, but I know one job I had as an employee, the commissions were based on sales, and returns came right out of my commissions. This was just a retail job in a department store. In contrast to when I worked as a realtor the law supported us getting a commission even if a deal fell through, depending on the specific circumstance.

@JLeslie In my career, I worked in the shirt business, software and electronics components industries. In all cases, commissions on returns were deducted when the credit memo to the customer was issued. Otherwise what is to stop a salesperson from overshipping a customer, knowing full well the goods would be returned?

When a customer went bankrupt or into receivership and we had to write off a receivable, commissions were never deducted. The credit decision was an administrative decision. If we wanted the sale badly enough to take a risk on whether we would get paid or not, that is not the salesperson’s issue.

SRM

@smorgan Yes, you make a good distinction. If someone bought something and I received a commission and then say the buyer’s check bounced, my commission was not deducted.

But, let’s say someone picked up something I put on hold three days after my last day at work because I quit. That commission would never be paid to me, because I no longer am on payroll. Same with if there is a return a week after my last day, I wouldn’t be sought out to pay back a commission.

@jleslie Your comment about being paid subsequent to separation brought back an odd recollection.
I sold Ladies’ shoes for five years in college and resigned a couple of weeks after graduation to start my first accounting job.
A couple of months later I got a check in the mail from the shoe store for something like $2.00. A customer had put something I sold her on lay-away and paid for it when it got closer to Xmas and legally I was owed the commission.

SRM

@smorgan What state was that in?

I worked on 58th and Lexington in Manhattan at a place called Alexanders. I graduated college in 1972 to date the incident

SRM

LOL. I know what Alexander’s is. I used to shop there. :) I probably was in the store as a little girl while you were working.