In the US, employers can reclaim commissions as long as the clawback policy is clearly stated in a written agreement. This could include scenarios such as a sale cancellation, customer returns, or non-payment by the client. If the commission was paid prematurely based on a conditional contract that fell through, companies are legally allowed to recoup those funds. Employers are also legally entitled to claw back commissions in cases of fraud or unethical conduct. For instance, if a salesperson misrepresents sales data or engages in fraudulent activity, companies can legally recover those commissions​. Keep in mind the legality of commission clawbacks varies by state. Some states, like New York and California, have strict labor laws that regulate wage deductions, including commissions. In these states, clawbacks need to comply with wage and hour laws, meaning commissions considered "earned wages" are harder to claw back without explicit contractual provisions.