The Basics – Paying Employee Commissions Part II
Paying employees on a commission basis makes a lot of economic sense for employers and employees in many instances. However, the fact that wages earned on commission are contingent upon numerous factors makes it fraught with labor law landmines and failure to properly pay employees’ commissions could constitute “wage theft” in California. I previously discussed the basics of paying employees a commission. In this part, we will examine a few more common issues with commission pay in California. 1. What if a commission only employee earns no commission in a given pay period? California labor law requires that every employer pay each employee at least minimum wage for all hours worked in a payroll period. If the employee is a non-exempt employee and works overtime, s/he is also entitled to overtime pay, even if she failed to “earn” any commissions in that period. 2. Are all commission employees exempt from overtime? No. The default rule in California is that employees are entitled to overtime pay and meal and rest breaks unless they fall under certain exemptions. There is an exemption … Continue reading
April Edition of the Employment Law Blog Carnival
I am delighted to host this month’s edition of the Employment Law Blog Carnival but was tearing my hair out trying to choose a theme. I finally settled on a non-religious Easter traditions theme. Growing up in a Buddhist country like Thailand very few people celebrated Easter so I just didn’t get the whole Easter bunny that laid colorful eggs thing. I am taking this opportunity to do some research on the non-religious Easter traditions here in the United States. According to the University of Florida’s Center for Children’s Literature and Culture, the origin of the celebration — and the origin of the Easter Bunny — can be traced back to 13th-century, pre-Christian Germany, when people worshiped several gods and goddesses. The Teutonic deity Eostra was the goddess of spring and fertility, and feasts were held in her honor on the Vernal Equinox. Her symbol was the rabbit because of the animal’s high reproduction rate. Spring also symbolized new life and rebirth; eggs were an ancient symbol of fertility. Speaking of fertility and reproduction, Steve Peltin at Washington Workplace Law … Continue reading
The Basics – Paying Employee Commissions
Happy New Year, and may 2012 be a year full of innovation, success, and happiness for you and your business. With the new laws that went into effect this month, employers have been (or should be) busy reviewing and revising their employee handbooks, offer letters, and employment policies to ensure compliance with the new California laws. Since you are knee deep in the process, I will spare you another post on the new laws that go into effect in 2012. Instead, we’ll do a Q&A on the basics of paying employees on commission. Also, by January 2013, commission-based employment agreements for services provided in California must be in writing. 1. Who could be paid on commission? Employees who are involved in selling a product or service; AND Commission earnings are a percentage of the price of the service or product sold; AND Employees’ sales duties must not include making the product or rendering the service. 2. Is it o.k. for employers to deduct commissions paid from future commissions? It is permissible for an employer to have a commission policy that provides that … Continue reading
Could UPS Have Saved $96,000 with a Well-Written Job Description? Maybe
The end of the year is fast approaching, which means that it is time for California employers to evaluate their policies and procedures to ensure compliance with new California laws that go into effect in January 2012. While you’re cleaning house, don’t forget to review each job description at your company. Here’s why. Last month, United Parcel Service (UPS) was ordered to pay more than $96,000 in damages after the company fired an employee because of her disability. The Fair Employment and Housing Commission (Commission) determined that UPS unlawfully terminated the employee who was able to perform the essential functions of her job. UPS hired the employee in question in 1997 primarily as an Operations Management Specialist. Her essential duties were to handle customer calls and complaints on shipments. Although she occasionally located packages in a warehouse, handling packages was not part of her job. In 2007, the employee had knee surgery and took a leave of absence to recover. She continued to carry out the essential customer service functions of her job. She had some restrictions, such as limited standing, … Continue reading
California Pregnancy and Parental Leave Laws
A few weeks ago I discussed a new California law requiring employers to continue providing benefits to employees on pregnancy leave. Since then, I have received questions on parental rights in California. In response, today’s post will discuss 3 bodies of law that affect California employees’ parental leave rights. California’s Pregnancy Disability Leave (PDL) California Family Rights Act (CFRA) Contractual Rights California’s Pregnancy Disability Leave (PDL) California Government Code section 12945 makes it unlawful for an employer to deny reasonable leave, up to four months, to a female employee who is disabled by pregnancy, childbirth or related medical conditions. The leave may be intermittent (e.g., for doctor’s appointments or sporadic episodes of pregnancy related disability) up to a total of four months. The employee shall be entitled to utilize any accrued vacation leave during this period of time. The employee has a right to reinstatement to the same or substantially similar position. If the employee requests that the guarantee to reinstatement be in writing, the employer must do so. (Cal. Code, Regs., tit. 2, § 7291.9, subd. (a).) However, an … Continue reading
Do Interns Have to be Paid in California?
Anyone who has dipped their foot into the job market in the last few years will attest to the fact that it is an employer’s market. New graduates, current students who want to get a leg up, and even not so new graduates are increasingly willing to work for free in hopes of getting their foot in the door and landing a full-time job or just to have something to fill a growing gap in their resume. Many employers are more than happy to take advantage of the free labor. But should you? California and federal law requires payment of minimum wages and other protections to employees. These protections are not extended to independent contractors or trainees and interns. However, misclassification of independent contractors and interns could be extremely costly to employers. Do interns have to be paid? It depends on whether the person working for you constitutes an intern exempt from minimum wage laws. An opinion letter issues by the California Division of Labor Standards Enforcement (DLSE) outlines 6 criteria used to analyze whether a worker is an … Continue reading
Commission Agreement Law in California
Governor Brown signed AB 1396, which requires that as of January 1, 2013, a commission agreement for services to be provided in California must be in writing. The writing must set forth the method by which the commissions are to be computed and paid. An employer is required to give a signed copy of the contract to the employee and obtain a signed receipt for the contract from the employee. TIP: Although the AB 1396 does not go into effect until 2013, it is a good practice for employers to enter into a commission-based agreement in writing to ensure that each party clearly understands how commissions will be computed and paid. If you have any questions regarding this or any of the new California laws that were recently passed, feel free to contact us or call 949.529.0007.
New California Law: Continued Health Benefits While on Maternity Leave
We continue on our review of the new California laws that go into effect on January 1, 2011. The bill of the day is SB 299. As of January 1, 2012, employers will be required to continue group health coverage for up to 4 months for female employees who take pregnancy disability leave (maternity leave). Currently, employers are only required to provide group coverage for up to 12 weeks while employees are on pregnancy leave. The federal Family and Medical Leave Act (“FMLA”) and the California Family Rights Act (“CFRA”) require employers to allow female employees to take up to 4 months of unpaid maternity leave for a “pregnancy-related condition.” The pregnancy disability leave is in addition to the 12 weeks of “maternity leave” which is allowed for parental bonding. With the new law, employers must continue the healthcare benefits of an employee on leave for pregnancy disability for up to 4 months on the same terms and conditions as before the pregnancy leave. For example, if the arrangement was for a 50/50 split on the premium, that arrangement must continue … Continue reading
New California Law: Wage Notice Requirement and Increased Exposure for Employers
AB 469, which is titled the “Wage Theft Prevention Act” is aimed at ensuring the collection on judgments against employers for violations of wage laws. Increased Exposure for Employers Who Violate Wage Statutes 1. The new law will make it a misdemeanor if an employer willfully violates specified wage statutes or orders, or willfully fails to pay a final court judgment or final order of the Labor Commissioner for wages due. 2. The new law will extend the time limit for the Division of Labor Standards Enforcement to commence a collection of a statutory penalty or fee against an employer from 1 year to 3 years after the penalty or fee became final. 3. The new law will extend the time required for an employer who has been convicted of a subsequent wage violation or who has failed to satisfy a judgment to maintain a bond for 2 years (up from 6 months). The bond is necessary in order for the business to continue operating. New Wage Notice Requirement Additionally, this new law will require an employer to provide each … Continue reading
New California Law: Employee Credit Report
The recent deadline for California Governor Jerry Brown to pass or veto the bills on his desk resulted in a long list of new laws passed in California. Like we don’t have enough right? In an effort to share the legal updates without totally overwhelming you, I will try to post one new law a day for the next week or two so check back daily. We’ll start with requesting an employee credit report today. Assembly Bill 22 prohibits an employer or prospective employer, with the exception of certain financial institutions, from obtaining a consumer credit report for employment purposes unless the position of the person for whom the report is sought is: (1) a position in the state Department of Justice, (2) a managerial position, (3) a sworn peace officer or other law enforcement position, (4) a position for which the information contained in the report is required by law to be disclosed or obtained, (5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card … Continue reading