Commission Wages in California ::
CA Commission Wages
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California
Labor Law assists employees in collecting their commission
wages and limits the deductions an employer may take.
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What are "Commission
Wages"? |
Commissions arise from the sale of a product or
service but not the making of a product or the rendering of a service.
In order to be a commission, the compensation must be a percentage
of the price of the product or service sold. The person receiving
the commission must be "principally" involved in selling
the goods or the services from which the commission arises. Commission
plans which refer to a percentage of a business, such as the cost
of the goods sold by the business, does not constitute a commission
wage.
Commissions arise out of agreements between the employer and employee
and are not required by any law. How they are computed also is
determined by the agreement, but deductions against commissions
are limited by labor law.
People often confuse commissions with bonuses or piece rate plans.
A bonus is a payment in addition to a regular wage, and a bonus
can be required by agreement or be discretionary. The are not predicated
upon the price of a particular product or service, but are usually
based on reaching minimum sales or making a minimum number of pieces.
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When an employer terminates an
employee, can the employee still receive commissions?
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Generally, the answer is yes. California courts have a policy against
forfeitures, and they don't want people to give up what they
rightfully earned. If some work remains to be completed to
earn the commission, California law directs the court to give
a pro rata share to the terminated employee. In other words,
once the sale is secured, the employer cannot avoid payment
by getting rid of the employee.
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What about an employee who quits?
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They might earn commissions depending on how much work is left to
be done to complete the sale. If the contract for the commissions
is clear and unambiguous, and substantial work remains to
be done in order to complete the sale, the employee who voluntarily
quits without finishing the work might not be entitled to
commissions.
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What
are permissible deductions against commissions? |
As stated above, commissions arise out of contract between the
employer and the employee. The commission may be based on either
gross sales figures or net sales figures.
However, under California law, the employer's cost of doing business
cannot be deducted from commissions or any other pay plan. For
example, one California case holds that an employer cannot deduct
damages to goods caused by the customer or returns of products
that were credited to other employees. As with all other wages,
California law prohibits deduction from commission for cash shortages,
breakage, loss of equipment, and other business losses that may
result from the employee's negligence.
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Filing a claim
for wages. |
California law offers employees two alternatives when making a
claim for wages: file a claim in superior court or file a claim
with the Labor Commissioner's office. At first blush, the California
Labor commissioner appears a better choice, you can represent yourself
, and this is certainly less expensive than hiring an attorney
and faster than going to Court. However, these benefits don't amount
to much if the law is not properly considered or the decision is
not properly reasoned.
Generally, in my experience, employees who
file with the Labor Commissioner's Office do not do as well as
employees who sue directly in superior court. Here are several
reasons why: Read
more on the California Labor Commission
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Harris & Kaufman Can Help You |
Harris & Kaufman is dedicated
to representing employees in disputes against their employers to
do with the Ca commission wage laws. Our attorneys can
assist you if you believe that your employer has broken the California
Labor Laws.
Our lawyers are experienced and have had numerous
trials, arbitrations, and appeals and have litigated on behalf
of thousands of employees.
Harris & Kaufman has represented workers in state and federal
court and in administrative proceedings before the Labor
Commissioner. Determined and aggressive, our cases include individual
disputes and class action lawsuits.
We are aggressive
and experienced lawyers and can help enforce your rights under
Cal. state law. Based in Sherman Oaks,
Cal. we serve greater Los Angeles, Orange County, Ventura
County, San Diego, San Francisco, Oakland, and have cases statewide.
Think
you have a claim? Email
Here
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