Employer draw too much in 2005, repay in one check in 2006?

[adalric]

From Illinois...

My wife was switched to all commissions late last year. Full-time sales associate. Each month, she receives one draw check and one commission check (with the draw deducted)... at least this was what was supposed to happen. Instead, the employer was not deducting the draw from the commission paychecks. She saw that this was incorrect, and told the employer. The employer has come back to her and told her she must pay back all the draw that was incorrectly given to her in this (Feb 2006) month's commission check! Also, they said they will not issue a new W-2 for 2005.

1. Can the company ask for this money back (I'm assuming yes, which is why I told her to make the company aware of their payroll department's inaccuracy)?
2. Is the company supposed to give her a new W-2 for 2005, as the money she received now has to go back to the employer?

Thanks in advance.

 

[pattytx]

If they adjust her commission check this month, and in future months, until the draw is recovered, they don't have to issue W-2Cs for 2005. The W-2 is based on what was, not what should have been. However, if they were to calculate what the NET (not gross) overpayment was, and your wife were to write them a check for that amount, then some W-2 corrections would need to be done.

If she is an outside salesperson, and as such, exempt from the minimum wage provisions of the FLSA, they can take her net pay all the way down to zero, with her authorization.

Since she knew about this, hopefully she has not spent the money.