Commission Wages

Commission wages are a type of non-hourly earnings that an employee receives for their productivity. An employer may pay employees on a commission basis if the employee is expected to be paid based on their production or sales, rather than by the hour. For example, an insurance agent who receives commissions for selling policies would be considered a commissioned employee under California law.

Commission wages can be earned in several ways, including:

Commission wages are non-hourly earnings paid to an employee for their productivity.

Commission wages are non-hourly earnings paid to an employee for their productivity. Commission wages can be earned in two ways:

  • Pay based on a percentage of the sales price of goods or services sold by the employee
  • Pay based on a base rate plus additional pay for sales over a certain amount

Under California employment law, commission wages paid to a non-exempt employee must meet the California minimum wage requirement.

California employment law requires that commission wages paid to a non-exempt employee meet the California minimum wage requirement. The federal minimum wage is $7.25 an hour, but California’s minimum wage is higher at $12.00 per hour as of January 1st, 2016. In addition to paying employees the required hourly rate, California overtime laws require that employees be paid 1.5 times their regular rate for all hours worked in excess of 8 hours a day or 40 hours a week – whichever is greater (CA Labor Code §510).

California commission wage laws require that any deductions from an employee’s pay meet the criteria for a permissible deduction.

California commission wage laws require that any deductions from an employee’s pay meet the criteria for a permissible deduction. The California Labor Code, specifically Section 226.2, states that an employer may not impose a deduction from wages of an employee without written authorization by the employee and a specified reason. The law also states that even if an employer has obtained proper authorization to make such deductions, he or she cannot do so when they reduce an employee’s wages below minimum wage.

The exception to this rule is when:

  • An employer makes a lawful deduction from wages due to garnishments or court orders issued after being sued by a third party (such as collection agencies)
  • An employer takes back part or all of their advance payment because it was given to the wrong person (i.e., someone other than yourself)

Wage deductions cannot be taken from earned commissions in California unless specified in the employee contract where the employer is allowed to offset any advances made to the employee by deducting from their paycheck as long as they do not result in a net loss to the employee.

  • You have the right to ask your employer about your wages.
  • If you do not have an agreement with your employer and are paid commission, deductions may not be taken from earned commissions in California unless specified in the employee contract where the employer is allowed to offset any advances made to the employee by deducting from their paycheck as long as they do not result in a net loss to the employee.

Employers may withhold payments due an employee if they are lawfully owed to the employer.

  • Employers may withhold payments due an employee if they are lawfully owed to the employer. Examples of lawful wage deductions include:
  • Payment for a loan or advance
  • Collection of a debt owed by the employee to the employer
  • Court-ordered garnishment or attachment

An employer may make deductions against any unpaid balance but only if those deductions do not reduce the total compensation below minimum wage.

If your employer makes a deduction, they must have a good faith belief that you owe them money.

Deductions cannot be made for personal reasons. For example, if an employee does not complete their work thoroughly or according to company policy, the employer may deduct wages for this reason. However, if an employee takes time off from work because his wife is sick or because he needs to take care of his children and then misses something at work that is outside of normal responsibilities (such as arriving late due to family issues), your employer cannot make deductions against unpaid wages based on these absences as there was no obligation from you as an employee to perform any specific task before taking time off.

In order for deductions made by employers in California comply with wage law requirements and ensure that employees are not being underpaid by the hour (or week) when it comes time paychecks arrive at home or at work–the following rules must be followed:

Commissions are considered earned at the end of each pay period when an employee performs services for which they were hired.

Commission wages are considered earned at the end of each pay period when an employee performs services for which they were hired. If an employer has a commission plan, they must comply with these rules.

Employees must be paid for all hours worked and cannot waive their right to compensation. Wages include commissions, bonuses and other types of pay that may be based on sales or earnings by the employee. An employer cannot deduct from earned wages without written authorization from their employee unless required by law or authorized in writing by the employee (e.g., deductions made from final checks if payment is not made within 30 days).

Your employer cannot take your commission wages without your agreement, and even then there are limitations on what can be taken.

Your employer cannot take your commission wages without your agreement, and even then there are limitations on what can be taken.

The law says that employers must pay wages at least twice per month. If the employer does not pay you when the next payday comes around, you have a legal right to demand payment of all unpaid wages immediately in writing. If your employer fails to comply with this demand, he or she may be liable for double back pay and penalties under California wage law.

You should contact an employment law attorney if you believe that your employer has violated any provision of California wage laws by failing to make proper payments or deductions from your paycheck or withholding payment altogether

Conclusion

If your employer fails to pay you the full amount of your commission wages, you may be entitled to recover damages in a lawsuit. Contact an experienced California employment law attorney today for help with your claim.