Media reports have mistakenly suggested that a recent decision
by the Sixth Circuit U.S. Court of Appeals (Kentucky, Michigan,
Ohio, and Tennessee) found the federal Fair Labor Standards Act to
prohibit recouping a draw or advance from future earnings.
However, a closer reading of the opinion proves that you can't
judge a ruling by its headings.
Stein v. hhgregg Inc. involved an FLSA
"collective action" against a seller of appliances,
furniture, and electronics. The plaintiffs were retail-sales
employees paid solely on a commission-basis. They received
what they called a "draw" when their commissions failed
to meet the FLSA's minimum-wage requirements.
Employees who received such a draw had to repay the sum in later
weeks for which their commissions exceeded that minimum wage.
They were required to "immediately pay the Company any unpaid
Deficit amounts" at the end of their employment. The
plaintiffs claimed that these policies violated the FLSA (and
