Do we as a group of employees for one employer need to seek an attorney for the following questions
Industry: massage therapy, spa, w2 employee. 70+ employees
My employer has stated that our commission as service providers is 50/50, and that after the split employer charges a set dollar amount to be taken from employees weekly gross pay to cover the costs of doing business, where employer stated covers all costs of products, supplies, utilities, hourly desk staff, ect. Then on top of that employer takes another 4% of the weekly gross pay to cover costs of advertising and marketing. All in all bringing employees 50% commission down to anywhere between 30-35%
Employer refuses to state to employees what the exact dollar amount is for these deductions, nor are these deductions listed on our paycheck. When an employee presses for that information for budgeting purposes, they are threatened with suspension or termination.
1. Since the cost of doing business is coming out of the employees side of the 50/50 commission and not before the split, is the employee allowed to deduct those costs when we itemize on our taxes.
Many products are not provided that are essential to the business and we are still required to pay out of pocket for. And employer refuses to reimburse employees, as well many products and equipment that are provided by employer are not safe to use. Ie. Massage tables are wobbly and in disrepair, provides shampoo to use in replace of antibacterial soap.
2. Is it legal for an employer to not only pass on the costs of doing business to employees but to also overcharge employees in order to profit from those deductions as the employees believe is happening but can not prove, since employer refuses to state the exact amount.
This past year we began offering a new service to go with the massage service. A jacuzzi soak for 30 mins before a 50 min massage. This soak takes a full hour out of the massage therapists time to set up the tub, supervise the client to ensure client safety and clean up. Employer has flat out refused to give us any commission split for this service. And if a therapist refuses to perform this service they are terminated.
3. Can an employer refuse to pay employees for certain services as long as employer meets minimum wage guidelines? Also to note some employees do not cover the minimum wage requirement and employer refuses to make up the difference.
All part time employees have been switched from w2’s to 1099’s with no change in how they are treated as employees. Employer has total control in this instance. I personally was not switched as I work 45 hrs per week, with no overtime, but am writing this on behalf of myself and six of my fellow coworkers. I will have more questions soon.
4. When some employees are classified as 1099 and some as w2. All deductions previously stated still are deducted but for the 1099 while the taxes are not making the overall pay between the two classifications drastically disproportionate to each other. Is this legal? And what are the tax implications for both parties?
1 attorney answer
After reviewing the situation you described above, it appears there may be something worth looking into with an attorney. I apologize as this is somewhat of a general answer but with the details you provided above it would definitely be a good idea to speak with an attorney at the very least. I do believe there could be minimum wage issues for you and other employees but I would need to know further details (I.E. how much you are getting commission wise etc.) Give a call to an employment attorney and discuss the issues in more detail. Most attorneys will do free phone consultations. Good luck!