Southern California Unpaid Commission Claim Lawyers
Employers who fail to give their staff the commissions they have earned may be breaking the law in California. A promised and earned commission must be paid by the employer. The employment lawyers at The Law Offices of Larry H. Parker assist workers in obtaining unpaid commissions.
Because unpaid commission income claims are so frequent, claims for unpaid commissions are at the core of what we do at The Law Offices of Larry H. Parker. Due to businesses’ realization that shifting expenses to workers is an effective method to boost profits, an increasing number of employees are being paid on a commission basis. They frequently refuse to pay commissions, especially substantial fees.
The commission’s legislation in California resembles the Wild West in several ways. There are no particular rules that specify the amount of commissions that should be paid to employees, in contrast to the laws that specify that employers must pay overtime earnings and establish the formula for calculating overtime compensation.
Contrarily, unpaid commission claims are based on contract law. This indicates that any intentions for not paying commission payments will be based on whatever the parties decide for the payment of commission wages.
The Problem With Commission Payments Agreements
The issue with this strategy is that both employers and employees frequently fail to put their commission agreements in writing, or the written agreements are vague and can signify different things. As a result, there will be disagreement between the parties on the terms of their contract and whether or not commissions have been earned.
Are You Receiving Fair Compensation For Your Work?
If you have a commission-based job, you have a right to pay for closing deals or finishing projects. In California, commissions are not considered discretionary, therefore as long as you complied with the commission criteria, your employer cannot withhold your payout. All employees are entitled to a basic rate of compensation in addition to commission so they can budget for the time they worked.
If you are unfamiliar with the rules governing commission payments, your employer may take advantage of you and refuse to give you the money you deserve.
How Do Commissions Work?
A commission is the portion of an employee’s salary that is based on what the employer pays for the goods or services the employee sold. A salesman may earn hybrid remuneration, which combines salary and commissions, or they may just be paid on the basis of commissions.
Bonuses and commissions are two distinct things. A discretionary bonus is cash given to an employee without reference to any explicit goals or criteria. The employer has complete control over this kind of compensation. A non-discretionary bonus, on the other hand, is cash that has been promised to an employee in accordance with a bonus plan and which, in accordance with its conditions, becomes binding once the employee starts to perform in accordance with the plan’s terms.
The minimum wage and overtime regulations continue to provide protection for those salespeople who are paid on commission. The nature of the work, the amount of compensation received, and the proportion of commission-based compensation that makes up the salesperson’s total compensation all affect whether overtime laws are in effect. Other considerations include whether the salesperson works inside or outside the place of employment. If a salesman is unsure whether they need to be paid for overtime, they should consult with a lawyer.
When Do Commissions Get Paid Out?
According to California law, an employee must form into a written contract with the employee whenever any portion of their pay is made up of commission. How the commission will be determined must be specified in the written commission agreement.
When the commission is earned should be specified in the commission agreement. For instance, a commission may be received after a customer signs a sales contract, after delivery, or after the consumer makes a payment.
Without a documented commission agreement, an employee who is paid on commission should seek legal counsel. If the commission agreement is vague about how commissions are to be calculated or when they are paid, it is also advisable to have legal counsel.
Check Your Contract
You must have a written agreement from your employer outlining the commission system’s operation as required by law. Common names for this document include “commission plan” and “commission agreement.” If you no longer have a copy, it should be on file with your company since you cannot begin working until you have signed this document.
Before beginning employment, you should carefully read this paper as it details your compensation. Ask The Law Offices of Larry H. Parker to review the agreement if you have any concerns about it or if something seems odd.
All commission contracts must guarantee that you get paid at least twice a month and that commissions are applied to the following pay period.- Commission can’t be withheld.
Claims For Unpaid Commissions And Wages
In California, unpaid commissions are a relatively typical sort of pay claim. Commissions that employees earn but are never paid for may be recovered through a wage claim. Although there are many different kinds of commissions, California law makes distinctions between them, and some “commissions” are not considered wages that can be recovered in a wage claim.
Commissions Are Wages
Commissions are considered “wages” in California. In order to recover unpaid commissions, you might file a wage claim with the Labor Commissioner or in court.
In the case of Keyes Motors, Inc. v. DLSE (1988) 197 Cal.App.3d 557; 242 Cal.Rptr. 873, the phrase “commission earnings” was defined to mean pay earned from commissions rather than from the production of goods or the provision of services. The court additionally concluded that a commission must represent a proportion of the selling price of the good or service in order to qualify as a commission.
Calculation of Commission
The calculation of commission is based on the contract between the employer and the employee. The commission can be calculated using either gross or net sales figures. Certain factors, as explained below, cannot be used when calculating “net” sales figures. The element on which the deduction from gross sales is based may not be used if it is based on a cost linked to the employer’s cost of doing business.
Retaliation for Failure To Pay Commission
Employers in California are prohibited from retaliating against employees who inquire about or complain about unpaid commissions. In some cases, it may be illegal for an employer to fire an employee in order to avoid paying the employee’s commission. It is also illegal to retaliate against an employee who reports nonpayment of commissions to a government entity, such as the California Department of Labor Standards Enforcement (or Labor Commissioner).
Discharging, demoting, suspending, or disciplining an employee in any way is considered retaliation if the action was prompted by the employee’s exercise of the right to seek payment of earned commissions.
Have Questions? Our Commission Pay Lawyers At The Law Offices of Larry H. Parker Can Help
When you work on commission, it might be difficult to determine what you should be making. This is where our group comes in. Our commission pay lawyers may analyze your agreement and salary to ensure you are receiving the money you deserve. If your employer isn’t giving you what you’re entitled to, we can file a claim and fight to collect all of the money you’ve been wrongly refused.
Contact us online or call 800-333-0000 today for additional information.