Company back charging for jobs they are not making profit on, exempt employee

[edrake]

What is the name of your state (only U.S. law)? Virginia

My husband is an exempt salaried employee with a company in Virginia that does mold remediation/water damage mitigation/insurance reconstruction etc. They have a habit of "back charging" him on jobs that they claim are not "profitable". He is not an independent contractor and he is not paid any overages on jobs that are over the profit margin. his work hours are 7 am to 5pm and always on call 24/7. He does not receive OT, has vacation time etc. So my question is it it legal for them to deduct this money from his paycheck. it is my understanding that if a job is not profitable, that is the cost of doing business and a risk you take as a business owner and that cost is not to be charged to your employee.

Also, he has an auto allowance, but also has use of the gas card. he drives roughly 2500 miles per month for work. they are now trying to also charge him for the charges on the gas card inthe amount of $1200 over the last 3 months. if there is nothing in writing with him agreeing to this is this legal?

 

[HC1432]

What is the name of your state (only U.S. law)? Virginia

My husband is an exempt salaried employee with a company in Virginia that does mold remediation/water damage mitigation/insurance reconstruction etc. They have a habit of "back charging" him on jobs that they claim are not "profitable". He is not an independent contractor and he is not paid any overages on jobs that are over the profit margin. his work hours are 7 am to 5pm and always on call 24/7. He does not receive OT, has vacation time etc. So my question is it it legal for them to deduct this money from his paycheck. it is my understanding that if a job is not profitable, that is the cost of doing business and a risk you take as a business owner and that cost is not to be charged to your employee.

Also, he has an auto allowance, but also has use of the gas card. he drives roughly 2500 miles per month for work. they are now trying to also charge him for the charges on the gas card inthe amount of $1200 over the last 3 months. if there is nothing in writing with him agreeing to this is this legal?

Your husband might have a wage claim for the lost profit charges based on what you are describing. Virginia law prohibits employers from deducting "shortages" from an employee's wages. However, there are many factors that could affect the situation including whether there is an employment contract in place that describes how his salary is to be structured.

I doubt he has a claim for the gas card charges unless he has an employment contract that states he is to be paid x amount for gas. In the absence of that, the company may have had a policy before regarding mileage and gas payments and then changed the policy and your husband is experiencing the negative impact of that change. This is legal.

 

[edrake]

Your husband might have a wage claim for the lost profit charges based on what you are describing. Virginia law prohibits employers from deducting "shortages" from an employee's wages. However, there are many factors that could affect the situation including whether there is an employment contract in place that describes how his salary is to be structured.

I doubt he has a claim for the gas card charges unless he has an employment contract that states he is to be paid x amount for gas. In the absence of that, the company may have had a policy before regarding mileage and gas payments and then changed the policy and your husband is experiencing the negative impact of that change. This is legal.

there is no contract. he is on salary with a quarterly bonus based on if certain goals are met, but nowhere does anything state that he is responsible if they make less than they want on a job

 

[LdiJ]

there is no contract. he is on salary with a quarterly bonus based on if certain goals are met, but nowhere does anything state that he is responsible if they make less than they want on a job

Then what they are doing is ridiculous. It would be valid for them to reduce/eliminate bonuses based on a lack of profits, but to attempt to deduct from wages is blatantly illegal.

I think that your husband needs to be looking for a new job. All the signs point to this company being in very poor financial shape and close to closing their doors.

However, I will say that its not generally normal for someone to get both an auto allowance AND free gas. That might happen if the auto allowance is very low, but its generally not the norm.

 

[edrake]

Then what they are doing is ridiculous. It would be valid for them to reduce/eliminate bonuses based on a lack of profits, but to attempt to deduct from wages is blatantly illegal.

I think that your husband needs to be looking for a new job. All the signs point to this company being in very poor financial shape and close to closing their doors.

However, I will say that its not generally normal for someone to get both an auto allowance AND free gas. That might happen if the auto allowance is very low, but its generally not the norm.

i understand about the gas, except for the fact that he drives an excessive amount, he put close to 40K miles on his car last year for work, and what he is getting for auto allowance works out to less than .30 per mile. I just think they are taking advantage. And yes he is starting to look for a new job. Just wanted to see if when he leaves if he would have a case for the other deductions

 

[LdiJ]

i understand about the gas, except for the fact that he drives an excessive amount, he put close to 40K miles on his car last year for work, and what he is getting for auto allowance works out to less than .30 per mile. I just think they are taking advantage. And yes he is starting to look for a new job. Just wanted to see if when he leaves if he would have a case for the other deductions

Do you both realize that you can claim a Schedule A deduction on your tax return for the difference between what the employer gives as a mileage allowance and the standard mileage rate? The standard mileage rate for 2015 is 57.5 cents per mile. So he could claim a deduction for 27.5 cents per mile if he is only being reimbursed 30 cents per mile (and no longer receiving free gas). If he drives 40k miles in 2015 that would work out to an 11,000 deduction.

Yes, once he has a new job he could certainly contact the DOL to see if he can pursue a case for the other deductions.

 

[edrake]

Do you both realize that you can claim a Schedule A deduction on your tax return for the difference between what the employer gives as a mileage allowance and the standard mileage rate? The standard mileage rate for 2015 is 57.5 cents per mile. So he could claim a deduction for 27.5 cents per mile if he is only being reimbursed 30 cents per mile (and no longer receiving free gas). If he drives 40k miles in 2015 that would work out to an 11,000 deduction.

Yes, once he has a new job he could certainly contact the DOL to see if he can pursue a case for the other deductions.

yep, i do itemize our taxes and will be taking the deduction this year. last year they didn't say a word about the gas card since he drove so much and this year is when it has suddenly become an issue