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My wife and I are running into a bit of an issue. She currently works in the state of Nebraska as a leasing agent for apartment complexes. The way her company works is that she is paid as commission only, which since she works remotely is counted as an exemption from the minimum wage standard according to the FLSA (as I understand it).

However, the way their system works is as follows.

  • Every month, you are paid a base pay which is equivalent to renting six units.
  • In other words, if you only rent four units that month, you are still paid for six.
  • If you rent any more than six units, anything over those six is considered commission pay.
  • So, if you rent seven units you are paid for your six as base pay, and then one more as commission.

Now, this is where it gets a little sketchy in my mind.

  • If you rent only four of the six that count towards base pay, the next month you now "owe" the company two units, on top of the six that your base pay covers.

Over the course of two years, my wife now "owes" the company 9 units, however she is in the process of quitting. They are telling her that since she "owes" them those units, they may require that she pays them money upon departure to compensate for them, since she was already paid for them through her base pay over the last two years.

To me, this makes no sense. They paid her that money in the presumption that those units would eventually be rented. Not that she would compensate them in the event that they were not. It seems wrong to me that they could force her to return money that was paid to her during her employment.

If they wanted to stop paying her all base pay until she actually left the company, I would understand that since it is their choice to give it to her. And for the remaining two weeks that she has left she would simply not see her base pay.

However, to ask her to pay them back for money they already paid her seems like something that isn't or shouldn't be allowed.

My question is: what is the legality behind what they are asking her; is she, by law, required to pay them back money they've already paid her?

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    What does her employment contract with the leasing company say? She's bound by that contract, unless the contract itself breaks Nebraska law, which would be doubtful, but is possible. – BlueDogRanch May 23 at 18:44
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If the employment contract treats base pay as an advance on future commissions when an employee has not earned the minimum number of units, then the company is probably entitled to repayment of advances not earned out. On the other hand, if it treats the base pay as a guaranteed minimum, the company would not be entitled to a refund.

The specific wording of the contract will be vial here. There may also be state laws regulating such an arrangement.

Under Nebraska Revised Statute 48-1230.01 commissions not earned when an employee leaves must be paid:

on the next regular payday following the employer's receipt of payment for the goods or services from the customer from which the commission was generated.

  • According to my wife, she started this job as another position (something not dealing with commissions), when she switched over to this commissioned position, she never signed anything. They just switched her at her request. Does that keep her in the clear from having to pay a refund? – Nathan F. May 24 at 15:08
  • @Nathan F. Probably not. A contract need not be written and signed. If the employer told her the terms of employment, and knowing those terms, she started to work the job, she has probably implicitly accepted them and they form the contract, even if she never signed anything, or even saw a written record of the terms. She will probably need to consult an actual lawyer if she wants to contest the company's position. – David Siegel May 24 at 16:46

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